underwrite

verb
un·​der·​write | \ ˈən-dər-ˌrīt How to pronounce underwrite (audio) , ˈən-də-, ˌən-dər-ˈrīt, ˌən-də- \
underwrote\ ˈən-​dər-​ˌrōt How to pronounce underwrote (audio) , ˈən-​də-​ , ˌən-​dər-​ˈrōt , ˌən-​də-​ \; underwritten\ ˈən-​dər-​ˌri-​tᵊn How to pronounce underwritten (audio) , ˈən-​də-​ , ˌən-​dər-​ˈri-​tᵊn , ˌən-​də-​ \; underwriting\ ˈən-​dər-​ˌrī-​tiŋ How to pronounce underwriting (audio) , ˈən-​də-​ , ˌən-​dər-​ˈrī-​ , ˌən-​də-​ \

Definition of underwrite

transitive verb

1 : to write under or at the end of something else
2 : to set one's name to (an insurance policy) for the purpose of thereby becoming answerable for a designated loss or damage on consideration of receiving a premium percent : insure on life or property also : to assume liability for (a sum or risk) as an insurer
3 : to subscribe to : agree to
4a : to agree to purchase (something, such as security issue) usually on a fixed date at a fixed price with a view to public distribution
b : to guarantee financial support of underwrite a project

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Synonyms & Antonyms for underwrite

Synonyms

Antonyms

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Examples of underwrite in a Sentence

a university willing to underwrite an archaeological expedition
Recent Examples on the Web Not only is the coronavirus redefining daily life for Saudis, but plummeting oil prices are robbing the kingdom of the enormous wealth that was underwriting the new Saudi Arabia. Vivian Yee, BostonGlobe.com, "Saudi Arabia’s big dreams and easy living hit a wall," 16 May 2020 Not only is the coronavirus redefining daily life for Saudis, but plummeting oil prices are robbing the kingdom of the enormous wealth that was underwriting the new Saudi Arabia. Vivian Yee, New York Times, "Saudi Arabia’s Big Dreams and Easy Living Hit a Wall," 16 May 2020 German Chancellor Angela Merkel, backed by the leaders of Austria and the Netherlands, has opposed the idea of issuing common EU debt on grounds that her taxpayers would effectively be underwriting spending by poorer member states. Charles Riley, CNN, "China could emerge from the pandemic even stronger," 17 Apr. 2020 With fewer claims to pay out, some health insurers are using their improved balance sheets to help struggling providers secure loans, pay claims earlier and, in some cases, underwrite patients’ outstanding bills. WSJ, "Coronavirus Updates: Insurers Flex Balance Sheets to Help Hospitals, Doctors," 4 May 2020 Calling on its electronic printing press, the Fed will provide most of the money for the program, but commercial banks, such as JPMorgan Chase and Wells Fargo, will distribute and underwrite the loans. John Cassidy, The New Yorker, "The Man with the U.S. Economy (and Trump’s Reëlection Chances) in His Hands," 28 Apr. 2020 Jensen declined to say whether his American Federation is underwriting the attacks on Sawa. Daniel Bice, Milwaukee Journal Sentinel, "Bice: Here’s how dark-money groups flooded Milwaukee mailboxes while keeping their donors secret," 7 Apr. 2020 Revenue in that unit soared 31% from a year ago thanks in large part to big gains in trading revenue and fees from underwriting stock and bond offerings. Paul R. La Monica, CNN, "JPMorgan Chase CEO Jamie Dimon says US consumers remain strong," 14 Jan. 2020 The cruise line company is assisting Tropical Shipping and the Bahamas National Emergency Management Agency by underwriting the purchase and shipment of goods from South Florida throughout the month, officials said. Baltimore Sun Staff, baltimoresun.com, "Carnival Pride taking supplies to Bahamas from Baltimore for Hurricane Dorian relief," 9 Sep. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'underwrite.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of underwrite

14th century, in the meaning defined at transitive sense 1

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Time Traveler for underwrite

Time Traveler

The first known use of underwrite was in the 14th century

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Statistics for underwrite

Last Updated

22 May 2020

Cite this Entry

“Underwrite.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/underwrite. Accessed 3 Jun. 2020.

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More Definitions for underwrite

underwrite

verb

Financial Definition of underwrite

What It Is

Underwriting is the process that a lender or other financial service uses to assess the creditworthiness or risk of a potential customer.

Underwriting also refers to an investment banker's process of packaging and selling a security on behalf of a client.

How It Works

Underwriting refers to the structured process used by financial service companies, such as banks, investors, or insurers, to determine and price the risk from a potential client.  The underwriting process is a detailed and systematic analysis of a potential borrower's credit-worthiness, including employment history, salary, financial statements and performance, publicly available information, and independent credit reports.  The underwriting process is intended to determine the credit needs, the quality of the collateral assets to be used to support the borrowing, and the borrower's ability to repay the debt.  Upon completion of a formal underwriting process and a summary presented to a credit committee within the lender, the lender will either approve or reject the request for a loan.

Similarly, an insurance company will evaluate the risks of a potential candidate for insurance, based on a variety of actuarial factors.  The bottom line from such an underwriting process is to price the insurance in accordance with its associated risk.

In securities trading, underwriting also includes assessing the risk and pricing the security accordingly.  However, the formal underwriting process also involves agreeing to buy the security (by the underwriter) and then selling the security for a profit.  The underwriter effectively takes a risk by agreeing to buy the security at the established price.  In most instances, underwriters will line up buyers for the securities before they take on the security, so that it can "flip" the security to the buyer immediately.

Why It Matters

Underwriting is a critical step in the credit analysis and risk pricing process for almost all financial service companies.  For companies, understanding the underwriting process and the requirements at each stage of the process will allow a company to prepare and present itself accordingly.  For investors, the information contained in an underwriting is crucial to understanding the risks and potential rewards from a security's underlying asset.

Source: Investing Answers

underwrite

verb
How to pronounce underwrite (audio)

English Language Learners Definition of underwrite

formal : to give money to support (something, such as a new business) and agree to be responsible for any losses if it fails
technical : to agree to pay for a certain kind of loss or damage by offering (an insurance policy)
technical : to agree to buy (shares) that are not bought by investors when the shares are first offered for sale

underwrite

transitive verb
un·​der·​write | \ ˈən-dər-ˌrīt, ˌən-dər-ˈrīt How to pronounce underwrite (audio) \
underwrote\ -​ˌrōt, -​ˈrōt How to pronounce underwrote (audio) \; underwritten\ -​ˌrit-​ᵊn, -​ˈrit-​ᵊn How to pronounce underwritten (audio) \; underwriting

Legal Definition of underwrite

1a : to assume liability for (a risk) as an insurer the insurer underwrites individuals, not the group, in franchise health insurance
b : to issue or set the terms of (an insurance policy)
2 : to agree to purchase (all or part of a security issue) usually on a fixed date at a fixed price with the purpose or plan to resell by means of a public offering was a security brokerage firm which as part of its business underwrote speculative new issuesUFITEC, S.A. v. Carter, 135 Cal. Rptr. 607 (1977)
3a : to put up funds for or guarantee financial support of
b : to assess the risk of (as a loan)

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More from Merriam-Webster on underwrite

Thesaurus: All synonyms and antonyms for underwrite

Rhyming Dictionary: Words that rhyme with underwrite

Spanish Central: Translation of underwrite

Nglish: Translation of underwrite for Spanish Speakers

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