Functions of insurance underwriters

Functions of underwriters.

• Are insurers (insurance companies) who provide insurance cover.
• Assess risks (examine details in the proposal form)
• Cover or accept risks by:
• Singing their names against risks they have agreed to cover.
• Charge and collect premiums
• Specialise in different types of risks e.g. fire.
• Sell insurance policies to merchants through brokers.
• Pay commission to brokers.
• Earn profit as remuneration.
• Pay appropriate compensation when loss or risk occurs.
• Found at the Lloyd of London.
• Form syndicates to cover big risks.
• Can re-insure big risks.
• Have large capital to pay big compensations.
• Ensure unlimited investment.
• Suffer unlimited liabilities for losses insured.

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