In terms of insurance claims, what is the purpose of underwriting?

Underwriting plays a crucial role in the insurance process as it involves evaluating an applicant's risk profile and determining the appropriate premium for a policy. The primary purpose of underwriting is to price policies based on the level of risk that the insured represents to the insurer. Underwriters assess various factors such as an individual's health history, property characteristics, past claims, and other risk indicators to decide on coverage terms and premiums. This ensures that the insurer can adequately cover potential claims while remaining financially viable.

The efficient processing of claims, investigation of fraudulent claims, and setting customer service standards, while all important aspects of the insurance industry, do not encompass the primary function of underwriting. Instead, they are more related to claims management, loss prevention, and customer service operations within an insurance company.