Meaning & use
underwriting
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Meanings
noununcountable
The work of checking and accepting financial risk, such as agreeing to insure someone or to lend money.
Grammar: Used without 'a' or a plural: underwriting is a process, not a single thing.
Patterns
- underwriting of something
- insurance underwriting
- underwriting standards
The bank's underwriting team reviews each loan application before approval.
Insurance underwriting decides how much a policy will cost based on risk.
Strict underwriting meant fewer people qualified for mortgages that year.
noununcountablefinance
The business of buying new shares from a company and selling them to investors, usually for a fee.
Grammar: Common in finance; often appears before another noun, as in 'underwriting fee'.
Patterns
- underwriting of shares
- underwriting fee
- investment bank underwriting
The investment bank earned millions from the underwriting of the new stock issue.
Underwriting fees are paid to the bank that takes on the risk of selling the shares.
She works in equity underwriting at a large financial firm.
Common combinations
- insurance underwriting
- Insurance underwriting involves estimating how likely a customer is to make a claim.
- underwriting standards
- Loose underwriting standards contributed to the financial crisis.
- underwriting fee
- The underwriting fee is deducted from the money raised.
- risk underwriting
- Risk underwriting helps lenders avoid customers who are likely to default.
Synonyms and how they differ
- risk assessment
- A broader term for judging risk; underwriting specifically means accepting that risk for a fee.
- insurance
- The product or contract; underwriting is the process of deciding whether to provide it.
Word family
- underwrite verb
- To accept financial risk, especially by agreeing to insure or to buy shares.
- underwriter noun
- A person or company that evaluates and accepts financial risk.
Commonly confused: underwriting or underwriting (verb form)?
underwriting vs underwriting (verb form)
Do not confuse the noun 'underwriting' with the present participle of 'underwrite'. The noun names the activity; the verb describes the action.
Practice
The bank's ______ department checks each borrower's credit history before approving a loan.
Choose one answer.
The noun 'underwriting' fits because it names the department's activity. 'Underwrites' is a verb and would need a subject, and 'underwritten' is a past participle that cannot modify 'department' here.
Make it your own
Write a sentence using “underwriting”, then check it and compare it with the examples above.