What Does Adjusted Underwriting Profit Mean?
Adjusted underwriting profit refers to the financial gain of the insurance company out of the payments for premiums and its income from investments after subtracting money spent for business operations and the claims and benefits of its policyholders.
Insuranceopedia Explains Adjusted Underwriting Profit
An insurance company makes money by underwriting and issuing policies. Earned money directly from insurance underwriting is what is left after an insurance company has paid the claims of its policyholders and paid for activities related to the business, like salary for staff and utilities.
That is why actuarial science is so necessary in the industry. The actuary projects future expenses and calculates the amount that will be paid for in the future for claims and benefits. The actuarial projections guide an insurance company in terms of money and risk management.
Adjusted underwriting profit is also called underwriting gain.