underwriting

Vocabulary Word

Definition

'Underwriting' is a term often used in finance and insurance. For an IPO, it's when a bank agrees to sell a company's shares. In insurance, an underwriter decides whether to give a person or company insurance based on risk.

Examples in Different Contexts

In insurance, 'underwriting' is fundamental for risk assessment and premium determination. An insurance executive might say, 'Through meticulous underwriting, we accurately evaluate risks and set appropriate premiums, balancing profitability with customer satisfaction.'

Practice Scenarios

Finance

Scenario:

Our firm excels in supporting start-ups with their IPO process, particularly with underwriting and ensuring the shares are sold to the right investors.

Response:

Underwriting services are crucial. We look forward to working with your team for our impending IPO.

Business

Scenario:

The bank has agreed to underwrite our IPO. This aids us in distributing our new shares to the investors.

Response:

Excellent, the underwriting process for the IPO will give us a strong start in the market.