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5:00Underwriting: How an Insurer Prices YOUR Risk
You answer eight questions and a price appears in two seconds. Behind it sits a century of claims data, a frequency-times-severity calculation, and a deliberate bet that you will cost the insurer less than you pay.
Insurance reverses the usual order of business: you pay first, and the insurer only finds out what it sold months or years later when (or if) you claim. Underwriting is how it sets the price *before* knowing the cost. The job is to estimate your expected loss and then add enough on top to cover running the business and to leave a margin.
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