I’ve read every definition I can find and I’m none the wiser. In fact, I can actively feel my IQ decreasing.
I get it’s to do with risk but what does an Underwriter actually do on an average Tuesday?
Thank you!
In: Economics
On an average Tuesday, the underwriter is sitting around counting their money. Literally.
A mortgage or insurance broker’s job is to sell. They go out and find customers to make deals with. The underwriter is where the actual money comes from.
Lending to one customer is a risk, because if they can’t pay, you don’t get your money back. Insuring one person is also a risk, if they make a claim, you have to pay out more than made in premiums. Underwriters work through multiple brokers and have lots of customers, they can make money off of the good customers even if a few go bad…the risk is spread over the entire group, and that makes it more predictable. Knowing how much to charge to compensate for that risk is what underwriters do. If the rates are too low, they low money, if they are too high, they lose customers.
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