What is the primary function of an underwriter in insurance?

The primary function of an underwriter in the insurance industry is to evaluate and select risks that are more likely to be profitable for the insurance company. Underwriters use various criteria, including the assessment of the potential risk factors associated with policyholders and their properties, to determine which risks should be accepted and at what premium rate. This meticulous process helps in maintaining the financial stability of the insurance company by ensuring that only those risks that are deemed manageable and profitable are underwritten.

While assessing all types of risks indiscriminately would not be a responsible approach, since sound underwriting practices require careful evaluation of risk profiles. Providing customer service to clients is an important function in the insurance process but is not the primary responsibility of an underwriter; that role is typically handled by agents or customer service representatives. Processing claims is also a critical aspect of insurance operations, but it falls under the purview of claims adjusters rather than underwriters. Therefore, selecting profitable risks is the cornerstone of an underwriter's role, as it directly influences the company's profitability and risk management strategy.