(redirected from Underwriters)
Also found in: Dictionary, Thesaurus, Medical, Financial.
Related to Underwriters: Underwriters Laboratories


To insure; to sell an issue of stocks and bonds or to guarantee the purchase of unsold stocks and bonds after a public issue.

The word underwrite has two meanings. To issue an insurance policy on the life of a person or on property of another is to underwrite that person or property; hence insurance companies are also referred to as underwriters.

The other meaning refers to the issuing of stocks or bonds by a corporation or a government agency to raise capital. The underwriter is a company, often an investment bank, that agrees to sell the Securities. Under its contract with the corporation, the underwriter agrees to pay for any unsold shares.

An underwriter operates by purchasing all of the new issue of stocks or bonds from the corporation at one price and selling the issue in smaller lots to public investors at a price high enough to cover the expenses associated with the sale and to provide a profit. When making a Public Offering of securities, an underwriter is responsible for setting the offering price. It uses its knowledge of the Stock Market and current interest rates and yields to determine the likely demand for the issue.

Typically, an underwriter does not under-write and distribute a security issue alone but instead organizes a syndicate for the venture. Syndicates are often used when the amount of capital sought by a corporation is much larger than a single underwriter cares to risk. By dividing the underwriting of the securities issue, the risk is spread among the various members of the syndicate. The firm that originates the issue acts as manager of the syndicate.

If an underwriter cannot organize a syndicate large enough to cover the entire issue, it usually will arrange with stock brokerage firms to purchase shares at a reduced price, called a concession. This price reduction provides the brokerage firms with a margin to cover expenses and a small profit upon resale.

A corporation selects an underwriter either through private negotiation of a contract or through competitive bidding. In a bidding process, the corporation sets the terms of the issue and then invites potential underwriters to submit bids. The issue is then sold to the highest bidder.


v. 1) to agree to pay an obligation which may arise from an insurance policy. 2) to guarantee purchase of all shares of stock or bonds being issued by a corporation, including an agreement to purchase by the underwriter if the public does not buy all the shares or bonds. 3) to guarantee by investment in a business or project. (See: guarantor, guarantee, insurer, underwriter)


verb agree to support, assume a risk, assure, back, consent to support, countersign, endorse, fund, guarantee, guaranty, insure, pledge, promise, secure, shoulder, sponsor, support, take responsibility, uphold, vouch for
See also: agree, assure, authorize, avouch, bond, close, cosign, ensure, guarantee, indorse, promise, sign, sponsor, subscribe, subsidize, vouch, vow
References in periodicals archive ?
At the time of application, one can go online and verify information instantly rather than send or upload applications to the home office to have underwriters order a report and wait a week or two for it to come in.
Auto insurance underwriters pull detailed motor vehicle reports; check past tickets; review accidents, moving violations, and DUIs; and review type of occupation and how far work is from home," says Stephanie D.
Underwriters may request copies of minutes from board meetings and ask to review the audit committee charter, and with a five-year rotation of the senior auditing partner now required, underwriters typically ask about the length and scope of these relationships.
Some underwriters use independent services such as Marshall & Swift, or the Boeckh valuation systems.
The underwriter is the person(s) or firm actually conducting the due diligence.
72, Letters for Underwriters and Certain Other Requesting Parties.
Underwriters Reinsurance provides reinsurance to property and casualty insurers and reinsurers.
Second paragraph, first sentence of release should read: Morgan Keegan was the second-ranked underwriter in Arkansas with 22 senior managed issues totaling over $300 million (sted Morgan Keegan was the second-ranked underwriter in Arkansas with 22 senior managed issues totaling over $20 million).
The reality for D&O underwriters, probably today more than ever, is they must apply extreme diligence and attention to detail when evaluating these requests.
They discussed the topics in depth until the underwriters, their counsel and our counsel were satisfied that we'd resolved all the issues successfully.
At the closing, all of the consolidated assets and liabilities of the holding company that currently owns Underwriters Reinsurance, known as Underwriters Re Holdings Corp.
In a survey of 50 underwriters who currently use BlitzDocs, 56 percent process more than 50 loans a month and 78 percent process at least 20 loans per month.