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LogoutAny person who analyses and absorbs another party’s risk in exchange for a fee, which might take the form of a commission, premium, spread, or interest, is known as an underwriter. Underwriters are responsible for evaluating the degree of risk, or the probability that a result or investment’s real gains may differ from an expected outcome or return, for a variety of stakeholders.
Many businesses in the financial world rely on underwriters, including the mortgage industry, insurance industry, equities markets, and some popular kinds of debt security trading. A book runner is a term used to describe someone who works as a primary underwriter.
In the early days of maritime insurance, the word “underwriter” was coined. Insurance for a ship and its cargo was sought by shipowners to protect themselves in the event that the ship and its contents were lost. Shipowners would create a document that detailed their vessel, its goods, personnel, and intended destination.