What is the main responsibility of a company's underwriting unit?

The primary responsibility of a company's underwriting unit is risk selection and classification. Underwriting is the process through which an insurer assesses the risk associated with insuring an individual or entity. This involves evaluating the applicant's information, such as health status, lifestyle habits, occupation, and other relevant factors, to determine the likelihood of a claim being made.

Through effective risk selection, underwriters can make informed decisions regarding whether to accept an application for insurance coverage. Classification involves categorizing applicants into different risk categories, which then help in setting appropriate premiums. Those classified as higher risk may face higher premiums or even denial of coverage, while lower-risk individuals may benefit from more favorable terms.

This foundational role of underwriting ensures the insurance company maintains its financial stability by appropriately managing the risks it takes on through its policies. Other responsibilities, such as managing claims, policy marketing, and training insurance agents, are important but fall outside the core function of underwriting.