Underwriting

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Why you need this course:
For an insurer, underwriting is at the core of its business and includes risk selection, classification and rating, and policy issuance. Having a strong foundation in underwriting is a key to ensuring a strong book of business. An insurerís profitability often relies on the success of the underwriting department in performing its functions. This course provides you with the principles of establishing products, pricing those products, and selecting customers to whom the products will be sold. Underwriters have limited resources available for their use in policyholder selection, and they are limited in their activities by regulatory restrictions.

Upon successful completion of all nine modules in this course, you should be able to:

  • Describe the purpose of underwriting and an insurerís major underwriting activities to achieve that purpose.  

  • Explain how underwriters protect an insurerís available capacity.
     
  • Explain which type of insurance rates would be more appropriate in a given situation:

    • Class rates

    • Individual rates


  • Describe the responsibilities of underwriting management.
     
  • Describe the steps in the underwriting process that an underwriter follows in selecting policyholders.
     
  • Describe information sources that underwriters use in the underwriting process.
     
  • Describe four categories of hazards that underwriters must evaluate in reviewing an application for insurance.
     
  • Describe an underwriterís options when evaluating an application for insurance.
     
  • Explain how states regulate underwriting activities through restrictions on unfair discrimination, cancellation, and nonrenewal.
     

We recommend that you study the modules in the order presented in the course.

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