Underwriting


Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Wikipedia.

Underwriting

Acting as the underwriter in the issue of new securities for a firm.

Underwriting

1. The process of placing a new issue with investors. Underwriting involves the issuing company using one or (usually) more companies who are each responsible for placing a certain amount of the new issue. The underwriting firms contact potential investors to gauge interest and sell the issue. Underwriters guarantee the price for a certain number of shares of the new issue. See also: Bracketing, Oversubscribed, Undersubsribed.

2. Due diligence a lender conducts to ensure that a potential borrower is able to repay the loan.

Underwriting.

Underwriting means insuring.

An insurance company underwrites your policy when it agrees to take the risk of insuring your life or covering your medical expenses in exchange for the premium you pay.

An investment bank underwrites an initial public offering (IPO) or a bond issue when it buys the shares or bonds from the issuer and takes the risk of having to sell them to individual or institutional investors to recover its investment.

underwriting

the acceptance by a financial institution of the financial risks involved in a particular transaction, for an agreed fee. For example, INSURANCE COMPANIES underwrite INSURANCE risks such as damage to property paying out monies to policy holders wholly or in part to cover bona fide claims for compensation; MERCHANT BANKS underwrite new SHARE ISSUES, guaranteeing to buy up any shares that are not sold in the open market, and BILLS OF EXCHANGE. See LLOYDS, EXPORT CREDIT GUARANTEE DEPARTMENT.

underwriting

the acceptance by a financial institution of the financial risks involved in a particular transaction for an agreed fee. For example, INSURANCE COMPANIES underwrite INSURANCE risks such as damage to property, paying out monies to policy holders wholly or in part to cover bona fide claims for compensation; MERCHANT BANKS underwrite new SHARE ISSUES, guaranteeing to buy up any shares that are not sold in the open market.

Underwriting

The process of making a final determination on approval or rejection of a loan application.

Underwriting involves verifying the information that has been obtained from the borrower and that served as the basis for qualification, as well as assessing information on the applicant's credit worthiness.

Mentioned in ?
References in periodicals archive ?
That's where everything comes together and we'll continue to see much expert underwriting being done electronically from information sources being interfaced" The benefit?
Power tools: new and evolving technologies are helping personal lines underwriters properly assess risks and provide better rates for consumers
As noted above, RBSG has committed that GCM will conduct its bank-ineligible securities underwriting and dealing activities in accordance with the prudential framework established by the Board's Section 20 Orders.
ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT
has created an Exposure Management and Analysis Project, which gives the company's underwriting department a real-time, geographic analysis of exposure based on in-force policies.
Homesite Group Inc. receives Underwriting and Pricing Award
The Board's approval of the proposed underwriting and dealing activities extends only to activities conducted within the limitations of those orders and this order, including the Board's reservation of authority to establish additional limitations to ensure that Mabon's activities are consistent with safety and soundness, avoidance of conflict of interests, and other relevant considerations under the BHC Act.
Order Approving Notice to Engage in Nonbanking Activities
The firewalls share a common purpose: to prevent a bank from imprudently exposing itself to loss to benefit the underwriting or dealing activities of its affiliate.
Statement by Susan M. Phillips, Member, Board of Governors of the Federal Reserve System, before the Subcommittee on Financial Institutions and Regulatory Relief of the Committee on Banking, Housing, and Urban Affairs, March 20, 1997
Once & Done Underwriting, which is built upon Computer Science Corp.
Digital rescue: how three insurers used technology to solve underwriting problems, including speed, pricing and accumulation of risk
The proceedings of a national underwriting association squander scholarship, omitting rich content from concurrent sessions, when all of this could so readily be appended.
Nothing to lose but chains: rather than allow ourselves to stagnate at a time of great opportunity, we underwriters must become more involved
The system has improved the Cincinnati-based financial group's producer/customer service, underwriting results, operating efficiency and revenue, iNB enables a paperless process and automation of routine underwriting decisions, resulting in a jet-issue rate of 25% of issued policies.
Western & Southern Financial receives award in underwriting and pricing

Financial browser ?
Full browser ?