Underwriting

Underwriting is the process used by financial institutions, such as banks and insurance companies, to evaluate the risk of providing a loan or insurance policy to an individual or business. Underwriters assess various factors, such as credit history, financial stability, and relevant details about the applicant, to determine whether to approve the request and under what terms. Essentially, underwriting helps ensure that the lender or insurer makes informed decisions, balancing their potential risks with the benefits of taking on new clients.