Underwriting Income

The insurer’s profit on the insurance sale after all expenses and losses have been paid. When premiums aren’t sufficient to cover claims and expenses, the result is an underwriting loss. Underwriting losses are typically offset by investment income.


Examining, accepting, or rejecting insurance risks and classifying the ones that are accepted, in order to charge appropriate premiums for them.


The amount of insurance or reinsurance on a risk (or occurrence) which applies to a loss before the next higher excess layer of insurance or reinsurance attaches.


The result of the policyholder’s failure to buy sufficient insurance. An underinsured policyholder may only receive part of the cost of replacing or repairing damaged items covered in the policy.

Umbrella Policy

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Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

Ultimate Net Loss (UNL)

The loss amount, including covered loss adjustment expenses (LAE), against which the retention and the reinsurance limits apply. This term usually means the total sum which the assured, or any company as his insurer, or both, become obligated to pay either through adjudication or compromise, and usually includes hospital, medical and funeral charges and all sums paid as … Read more

Trust Agreement

An agreement under which certain assets are deposited by one party (the grantor), for the sole benefit of another party (the beneficiary), into an account managed by a third party (the trustee). In reinsurance, such an agreement is typically established to permit a licensed ceding company to take credit for non-admitted reinsurance up to the value … Read more


A transaction in which the owner of real property or personal property gives ownership to a trustee to hold and manage the property for the benefit of a third person, called a “beneficiary.” Also, the document setting up the trust. Trusts may be of several kinds; two common classifications are an “inter vivos trust” (one … Read more


A term used to explain the way information on financial matters, such as financial reports and actions of companies or markets, are communicated so that they are easily understood and frank.