Underwriter profession: duties and scope of activity
The development of the modern market has led to the emergence of a large number of new, and not all understandable specialties. One of them is an underwriter – a profession that is in demand in banking and insurance. The future of the company – its profitability or unprofitability – depends on the qualification of this person. His duties include assessment of insurance risk for a private person, for example, an apartment or a car. An underwriter studies the probability of various complex situations, and on their basis makes up the amount of insurance payments.
The global financial crisis of 2008 forced many segments to revise their structure and operating principles. Since 2010, the banking sector has followed the Basel III framework. This agreement assumes the use and development of risk management functions, which will help to protect the institution from liquidity decline. Underwriting is an important component of such measures. It is part of the concept of risk management and allows you to see and take control of the complex situations the company may face in the course of its activities.
In Russia, the profession of underwriter appeared in the early 2000s, and still remains popular and in demand. Demand for it increases the development of the lending segment, the emergence of new programs that require a thorough study of information about the client.
The name of the profession is translated from English as “sign”. Such specialist works in several directions:
- banking segment;
- stock market;
- insurance.
It is the responsibility of the underwriter to take into account as widely as possible various situations that may negatively affect the business or individual. On this basis, the specialist calculates the amount of insurance payment to be made. The underwriter’s professionalism and experience determine how financially successful the company will be. This specialist represents the interests of the insurer, and develops the tariffication of services, determines which case is insurance and which is not.
Underwriting, which operates on the stock market is engaged in management and control of the issue of shares and other securities, is responsible for further actions with them. These functions are taken over by a syndicate of investors, which can be organized for a short period of time. Their main responsibility is to control that the securities will be sold at a value as specified in the agreement.
In the syndicate, the underwriter organizes the process of placing securities on the stock market, interacts with the issuer, controls the movement of shares, options and promissory notes.
At the bank, a specialist in this profession assesses how reliable the client is. He makes a forecast based on two parameters: solvency and credit history. Underwriter can make his recommendations to the bank – offer different loan options that will reduce the risk of non-payment. The decision remains with the financial institution – to refuse the loan or to formalize cooperation with the client.
