un·der·write | \ ˈən-dər-ˌrīt , ˈən-də- , ˌən-dər-ˈrīt , ˌən-də- \
underwrote\ˈən-dər-ˌrōt, ˈən-də-, ˌən-dər-ˈrōt, ˌən-də- \; underwritten\ˈən-dər-ˌri-tᵊn, ˈən-də-, ˌən-dər-ˈri-tᵊn, ˌən-də- \; underwriting\ˈən-dər-ˌrī-tiŋ, 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

intransitive verb

: to work as an underwriter

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Synonyms & Antonyms for underwrite


bankroll, capitalize, endow, finance, fund, stake, subsidize



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Examples of underwrite in a Sentence

a university willing to underwrite an archaeological expedition

Recent Examples on the Web

The founders wanted to ensure that laws would command broad consensual approval: two powerful houses of Congress and the president had to agree on them, the Supreme Court had to underwrite their constitutionality. The Economist, "America’s electoral system gives the Republicans advantages over Democrats," 12 July 2018 The citizens’ initiative proposes to raise the city’s hotel room tax by as much as 3.25 percentage points to not only underwrite an expansion of the bayfront center but also boost funding for the homeless and street repairs. Lori Weisberg, sandiegouniontribune.com, "Backers of convention center initiative redouble efforts to qualify measure," 27 June 2018 The New York state legislature last week unanimously passed a bill that would require drug makers to underwrite the cost of collecting and disposing of medicines. Ed Silverman, STAT, "New York State may force drug makers to pay for drug take-back programs," 26 June 2018 The proceeds from this event support the EDGE Fund to underwrite upgrades to classrooms and other learning spaces with the most current technology, as well as to create and improve existing and future programs. Sue Strachan, NOLA.com, "De La Salle High School Board of Regents dinner looks to the future," 28 May 2018 The tourism board is the event’s presenting sponsor and teamed with the Pottstown Area Health and Wellness Foundation to underwrite the purse. Joe Juliano, Philly.com, "LPGA's developmental tour coming this week to Montgomery County," 20 May 2018 In March, the Development Finance Authority, which administrates the DFWR, announced a $1.28 million loan to underwrite BLU-tique Hotel under development in the historic United Building at Main and Market streets downtown Akron. Jennifer Conn, Akron Reporter, cleveland.com, "Akron Community Revitalization Fund awards $650k loan; makes way for Phase 2 of Northside Marketplace," 14 May 2018 And the state money can be used only to underwrite a project's public benefits, such as recreation, flood control and ecosystem improvements. Bettina Boxall, latimes.com, "Separating water and politics isn't easy in California," 5 May 2018 Palihapitiya sees his firm’s overall operations as akin to those of a bank, which can process a credit card application with software but needs people to underwrite million-dollar mortgages. Joshua Brustein, Bloomberg.com, "Impress the Algorithm. Get $250,000," 1 May 2018

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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Last Updated

12 Sep 2018

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

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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



English Language Learners Definition of underwrite

: to give money to support (something, such as a new business) and agree to be responsible for any losses if it fails

: to agree to pay for a certain kind of loss or damage by offering (an insurance policy)

: to agree to buy (shares) that are not bought by investors when the shares are first offered for sale


transitive verb
un·der·write | \ ˈən-dər-ˌrīt, ˌən-dər-ˈrīt \
underwrote\-ˌrōt, -ˈrōt \; underwritten\-ˌrit-ᵊn, -ˈrit-ᵊn \; 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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