Insurance Under the Hood: The Underwriting Process

When purchasing visitors medical insurance or travel medical insurance (or any insurance plan, for that matter), you would have seen the name of a company listed as the insurance plan’s underwriter. What exactly does the underwriter do? Let’s find out.

An insurance underwriter is the person or company that assesses the typical risk that a plan represents for the company, and how much it should charge for a particular plan. Typically, this figure is arrived at after working with detailed numbers and applying complicated actuarial formulas on them.

For example, if you are a 75-year-old man, your risk of claiming on a health insurance is obviously higher than if you are a 30-year-old. When creating a travel health insurance plan, the underwriters take into account various factors before fixing the premium rates. The underwriting process ensures that the insurance company fixes the rates so that it can ‘afford’ the plan that is offered.

What’s in the underwriting process for the plan holder? What most insurance applicants do not know is that their plan application usually passes through the hands of an underwriter. Also, a good underwriter will ensure that the plan rates are not just profitable for the insurance company, but also that they are competitive. So that’s what the underwriters do: make sure that the plan makes sense for you and for the insurance company.