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 impact finance, 'underwriting' can drive sustainable investment decisions. A sustainability officer might declare, 'Ethical underwriting practices are integral to align investments with our sustainability goals, promoting responsible and impactful financial strategies.'

Practice Scenarios

Real Estate

Scenario:

Our bank takes pride in its precise and thorough loan underwriting process. Each loan application undergoes a rigorous financial review.

Response:

I appreciate your thorough underwriting. Getting a mortgage loan with your bank instills confidence regarding repayment ability.

Insurance

Scenario:

Our goal is to provide insurance coverage that fits each customer's needs and risk profile. This entails a thorough underwriting process.

Response:

I understand. The underwriting process must be rigorous to ensure reasonable premiums and coverage.