Underwriting risk faced by property-casualty insurance companies may result from unexpected

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Underwriting risk for property-casualty insurance companies is the risk that the premiums collected are not sufficient to cover the claims paid out. This can happen if there are unexpected increases in loss rates, which would lead to higher claim payouts and lower profits for the insurer. Decreases in loss adjustment expenses or increases in investment yields would actually reduce underwriting risk, while cancellations of policies by customers would have an impact on the insurer's revenue but not necessarily on its underwriting risk.

Underwriting Risk Faced by Property-Casualty Insurance Companies May Result from Unexpected