Underwriting

In insurance, underwriting is to sign and accept liability and guaranteeing payment in case damage or loss occurs. Underwriting is provided by a large financial service provider such as a bank, insurer or investment house.

The name derives from the Lloyd's of London insurance market. Financial bankers, who would accept some of the risk on a given venture (historically a sea voyage with associated risks of shipwreck) in exchange for a premium, would literally write their names under the risk information that was written on a Lloyd's slip created for this purpose.