If diving deeper into insurance makes you curiouser and curiouser like it does me (mostly because the more I know, the less I know so I go down rabbit holes of information), I’m going to start off with the basics to help ease some of those burning questions you have. Today I’m talking about your biggest question: underwriters, who are they? No, they are not the people that draw under tables at restaurants but you’re close! In the insurance world, underwriters are professionals who evaluate and assess the risks involved in insuring people and assets. They must consider numerous variables before they calculate your premium to see if you pose a significant risk (aka to see if you are accident prone and will cost the insurance CARRIER an arm and a leg). Notice how I emphasized carrier, this is because your insurance agent has nothing to do with the price of your premium (as long as they shopped around for you to find the best coverage, which our agents already do here so no worries with us); the agents are really just the messenger when it comes to premiums, but they can offer you tips to help lower them, such as practicing safety to reduce hazards leading to claims.
“Why are they called underwriters?” I’ve been WAITIN’ for this one! I learned that the term “Underwriter” is believed to have been started by the Lloyds of London Insurance Company, which was founded in 1686 in, you guessed it –> London, England, so you can say this term has been around for AGES. To give a little history lesson: back when the term was invented there were no airplanes, so boats were used to get everything around the world (these boats were a couple major steps down from the luxury cruises we go on today, so no waterslides were involved which is really sad for them). Containers shipped by sea would list the contents on them and a representative of the insurance company would write the company name and premium below the contents of the container since shipwrecks were very common back then–keep in mind, they didn’t have navigation apps to let them know about the hazards ahead so we cant blame them for this… The owner of the container would pay a premium to ensure the contents would arrive safely.
So what I got from this was: long story short, the term underwriter was born because a man writing under shipping containers in case there was a shipwreck.
Now I want to research the origin of the name “insurance”, was it because someone kept misspelling the word “ensure” and it just became a norm to spell it that way? I will find out and get back to you all shortly with my findings.
I hope you enjoyed this little history lesson and that none of you knew about the origin behind the term “underwriter” before or else this was just me rambling for a few minutes…
Thanks for reading the Gen-Z Insurance Tea, where I’m the CEO of fun facts!