What is the primary goal of underwriting in insurance?

The primary goal of underwriting in insurance is to assess risk and determine appropriate coverage for applicants. Underwriting is a critical process that involves evaluating various factors associated with the applicant, such as their history, current circumstances, and the nature of the risk being insured. This thorough assessment enables underwriters to make informed decisions about whether to accept an application and under what terms, ensuring that the insurance company remains financially viable while providing suitable coverage to its clients.

By accurately determining the level of risk presented by the applicant, underwriters can help to establish the correct premium rates and coverage limits that reflect the risk profile. This process helps to maintain the balance between risk and reward for the insurer and guarantees that policyholders are provided with insurance products that meet their specific needs.