What is the term for the assessment of risk when underwriting an insurance policy?

The term for the assessment of risk when underwriting an insurance policy is referred to as risk assessment. In the context of insurance, risk assessment involves identifying, evaluating, and prioritizing risks associated with insuring potential policyholders. This process helps underwriters determine whether to accept the risk and on what terms, including pricing and coverage limits.

Risk assessment includes analyzing various factors such as the applicant's history, the nature of the insurable interest, and any external factors that could impact the likelihood of a claim. This careful examination is essential to ensure that insurers can balance their portfolios effectively and maintain financial stability.

While other terms like risk management, risk evaluation, and risk analysis are related concepts, they do not specifically refer to the particular process of assessing risk for underwriting purposes. Risk management encompasses a broader strategy for managing all types of risks, risk evaluation often pertains to the comparison of risks, and risk analysis generally refers to the systematic examination of potential risks, which may be a part of the overall risk assessment process but does not encapsulate it fully.