Underwriting

How to spell underwriting

12 letters · 4 syllables

How to pronounce underwriting

Say the part in capitals loudest.

What does underwriting mean?

1. nounThe business of assessing risk and agreeing to accept financial liability for it, as in insurance or the issuing of securities, usually for a fee.
2. verbPresent participle of underwrite: agreeing to bear the financial risk of, or to guarantee funding for, something.

Underwriting in a sentence

• noun

  The bank earns a fee for underwriting the new bond issue.

• verb

  The foundation is underwriting the cost of the new research wing.

• noun

  Strict underwriting standards reduced the insurer's losses last year.

• verb

  Three banks are underwriting the company's stock market flotation.

Where does underwriting come from?

Language of origin: Germanic

The word is a compound of the Old English under, meaning 'beneath' or 'below', and writan, meaning 'to scratch, draw, or set down in letters'. Its literal sense was simply to write one's name underneath something, a direct native echo of the Latin subscribere, which gave us 'subscribe' and likewise means 'to write under'. The modern financial meaning was born at Lloyd's coffee house in late seventeenth century London, where merchants willing to insure a ship and its cargo would write their names one beneath another at the foot of the policy, each accepting a share of the risk; the act of signing under the terms became 'underwriting'. From insurance the term spread in the nineteenth century to the issuing of securities, where a bank guarantees to buy any unsold shares. Because the two halves are such ordinary English words, the spelling trap is mostly remembering that it is a single closed compound with no hyphen and a single 't' before the -ing.

How the word is built

• under- (beneath)
• write (to set down in letters)
• -ing (forming a noun or present participle)