What is the primary function of an insurance underwriter?

The primary function of an insurance underwriter is to assess risk and determine the terms and pricing of insurance policies. This involves evaluating the information provided in insurance applications, analyzing the likelihood of claims being made, and establishing the appropriate premiums for different levels of coverage. Underwriters use data from various sources, including past claims, industry standards, and statistical models, to make informed decisions on whether to accept or decline applications and on how to tailor policies to align with the insurer’s risk appetite.

The role of the underwriter is crucial because it helps maintain the insurer's financial stability while offering coverage to clients. By accurately determining risk levels, underwriters contribute to the underwriting profit of the insurance company, ensuring that the premiums collected are sufficient to cover claims and operating expenses.

Other options focus on different roles within the insurance industry. While paying claims is an essential function of insurers, it is typically managed by claims adjusters rather than underwriters. Selling policies is the role of insurance agents or brokers, who interact directly with consumers. Managing healthcare costs relates more to functions like care management and health policy rather than the risk assessment and pricing responsibilities of an underwriter. Therefore, option B squarely defines the core duty of an insurance underwriter in the insurance process.