What is the key goal of the underwriting process?

The key goal of the underwriting process is to evaluate risks accurately and decide on coverage. Underwriting involves assessing various factors that contribute to the risk profile of an applicant seeking insurance. This includes analyzing personal information, historical data, industry trends, and other variables to determine the likelihood of a claim being made.

The primary objective is to ensure that the insurer can adequately understand the potential risks associated with insuring a particular individual or entity. By making informed underwriting decisions, insurers can set appropriate premium rates, ensure sustainable coverage limits, and ultimately protect the insurer's financial stability while providing fair access to insurance for policyholders.

While increasing the number of policies sold, managing claims, and providing customer service are important aspects of the insurance business, they are not the foundational goal of the underwriting process, which is centered on accurate risk evaluation and coverage determination.