ULTIMATE NET LOSS – The total sum which the assured, or any company as his insurer, or both, become obligated to pay either through adjudication or compromise, and usually includes hospital, medical and funeral charges and all sums paid as salaries, wages, compensation, fees, charges and law costs, premiums on attachment or appeal bonds, interest, expenses for doctors, lawyers, nurses, and investigators and other persons, and for litigation, settlement, adjustment and investigation of claims and suits which are paid as a consequence of the insured loss, excluding only the salaries of the assured’s or of any underlying insurer’s permanent employees.
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UNDERWRITING – Refers to the issuing and signing of an insurance policy by a party to assume liability in case of specified losses.
UNDERWRITING EXPENSE – Cost associated with the decision by an insurer to accept or decline a risk; including but not limited to meetings with insureds or brokers, actuarial review of loss history, or physical inspections of exposures.
UNDERWRITING PROFIT – The insurers profit before investment income and income taxes.
UNEARNED PREMIUM – That portion of the original premium that applies to the unexpired portion of risk. A fire or casualty insurer or reinsurer must carry a reserve against all unearned premiums as a liability in its financial statement, for if the policy should be canceled, the company would have to pay back the unearned part of the original premium.
