What is the primary role of an underwriter in insurance?

The primary role of an underwriter in insurance is to evaluate and classify risks for the insurer. This involves assessing a potential policyholder's information to decide whether to offer coverage and under what terms. Underwriters analyze various factors such as health history, lifestyle, the types of coverage requested, and other relevant data to determine the level of risk involved. Based on their evaluations, they play a crucial role in ensuring that the insurance company maintains a balanced portfolio of risks.

This function is essential for the financial stability of the insurer since accepting too many high-risk applicants without proper assessment could lead to significant losses. While determining premiums and processing claims may involve some input from underwriters, these activities are not their primary functions. Selling insurance policies is typically the role of agents and brokers, rather than underwriters, who are more focused on risk assessment and management.