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A firm, usually an investment bank, that buys an issue of securities from a company and resells it to investors. In general, a party that guarantees the proceeds to the firm from a security sale, thereby in effect taking ownership of the securities.


A company, usually an investment bank, that an issuer hires to place a new issue with investors. The issuer normally hires several underwriters for a single issue, where each is responsible for placing a certain amount of the new issue. The underwriters contact potential investors to gauge interest and sell the issue. Underwriters guarantee the price for a certain number of shares of the new issue. Because of their expertise on placing securities with investors, using underwriters often increases the chance that the placement will be successful. An underwriting firm is also called a house of issue. See also: Bracketing, Oversubscribed, Undersubscribed, Underwriting agreement.


An investment banker that acts to guarantee the sale of a new securities issue by purchasing the securities for resale to the public. Also called sponsor. See also agreement among underwriters, investment banker, lead underwriter.


An underwriter, typically an investment banker, may buy an entire new securities issue from the company or government offering it and resell the issue as individual stocks or bonds to the public.

Or, in a best-efforts arrangement on a stock IPO, the underwriter may commit to selling as many shares as possible without actually buying the securities.

Part of the underwriter's job is to weigh the risks involved in taking on the financial responsibility of finding buyers against the profit to be made on the difference between the price paid for the issue and the profit it will generate.

Typically, a number of bankers join forces as a purchase group, or syndicate, to spread the risk around and to reach the widest possible market.

Insurance policies also need an underwriter. In this case, the term refers to a company that is willing to take the risk of insuring your life, property, income, or health in return for a premium, or payment.

References in periodicals archive ?
Along with expansion into the staffing industry, Empire Underwriters is expanding into a number of other industry classes and coverages all coming soon.
Asked if there is any reason agents, brokers or customers of Applied Underwriters should be concerned about the move, Silver replied, "Absolutely not.
In insurance organization, underwriting responsibilities are delegated to line and staff underwriters who coordinate the day to day risk selection decisions and the management level underwriting activates.
Cadence Bancorporation is not selling any shares of class A common stock and will not receive any proceeds from the purchase of the additional shares by the underwriters. The purchase of the additional shares by the underwriters will not affect the number of shares of class-A common stock which are currently outstanding.
In sum, bond sales require access to investors and most often this function is outsourced to underwriters. Governments' outsourcing this function could encourage competition through competitive bidding (or at least use RFPs for sole source procurement of underwriters), focusing on the outcomes of the sales, and evaluating the results.
The battleground over whether mortgage underwriters are exempt is the second prong of the test--whether their primary duty is the performance of office or non-manual work directly related to the management or general business operations of their employer or their employer's customers.
As recently as the 1980s, underwriters were viewed as clear leaders, the people responsible for putting the surplus on the line and defining the company in the marketplace.
Underwriters should embrace that change, not resist it, because by eliminating the mundane, they can focus on the exceptional.
In order to provide value-added service to their producers, many BGAs hire home office underwriters or train underwriters in-house.
However, prior studies on IPO earnings management have largely overlooked the potential roles played by underwriters. Ducharme et al.
Sadly, tension often characterizes relationships between claim adjusters and underwriters. There is unfortunately a professional enmity that develops between these two departments and functional areas within an insurance company.