Vocabulary word Underwrite - Practice with online flashcards, spelling bees and vocabulary quizzes

Business and Commerce

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High School 5

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SAT 10 (Scholastic Assessment Test)

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Dictionary Definition of underwrite

To assume financial responsibility for a particular risk or investment.
"The bank agreed to underwrite the construction loan for the new building."

Detailed Meaning of Underwrite

In the context of insurance, underwriting involves assessing the likelihood of a particular event occurring and setting the premiums or rates accordingly. This process involves evaluating various factors, such as the person's age, health status, occupation, and lifestyle, to determine the level of risk involved. In the context of investment banking, underwriting involves providing financial backing or support for a particular project or venture. This may involve purchasing a certain number of shares of stock or bonds, or providing a guarantee of financial support in the event of unforeseen circumstances. Overall, the verb "underwrite" implies a level of financial responsibility and risk assessment, and is often used in the context of insurance or investment banking.

Example Sentences for Underwrite

1. The insurance company will underwrite the policy upon approval.
2. The bank agreed to underwrite the loan for the new business.
3. We need a financial institution to underwrite our project.
4. The government will underwrite the costs of the infrastructure development.
5. The charity organization requested sponsors to underwrite their fundraising event.
6. The venture capitalist offered to underwrite the startup's expansion plans.

Origin and Etymology of Underwrite

The verb 'underwrite' has its origins in the world of insurance and finance. Its etymology can be traced back to the practice of insuring ships and their cargo in medieval Europe. The term 'underwrite' is a compound of two Old English words: 'under' and 'writan.' 'Under' in this context means 'beneath' or 'in support of,' while 'writan' means 'to write' or 'to sign.' In the early days of marine insurance, individuals who agreed to provide financial backing for a voyage would sign their names under the insurance policy, indicating their commitment to assume a portion of the risk. This act of signing or endorsing the policy came to be known as 'underwriting.' Over time, the term extended to various forms of financial risk assumption beyond maritime insurance, such as in the underwriting of stocks and bonds. Today, 'underwrite' is commonly used in the context of insurance, securities, and lending, signifying the act of assuming financial responsibility for a specific risk or investment.

Quiz Question - Test Your Understanding

Find the correct meaning of the verb underwrite:

disavow

sponsor

reject

refuse

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More Usage Examples of Underwrite

1. The company sought a reputable underwriter to underwrite their public offering.
2. The university secured a grant to underwrite the research project.
3. The insurance company will underwrite the damages caused by the accident.
4. They hired a team of experts to underwrite the feasibility of the project.
5. The foundation agreed to underwrite the construction of the new hospital wing.
6. The bank's role is to underwrite the risks associated with the investment.
7. The underwriter carefully assessed the financial health of the company.
8. The government agency will underwrite the costs of the disaster relief efforts.
9. The syndicate of banks agreed to collectively underwrite the company's debt.
10. The insurance broker will help you find a suitable underwriter for your policy.
11. The investment firm will underwrite the issuance of new bonds.
12. The university received a grant to underwrite research in the field of medicine.
13. The charity organization depends on generous donors to underwrite their programs.
14. The underwriter analyzed the financial statements before approving the loan.