What is the purpose of field underwriting in insurance?

Field underwriting serves a critical purpose in the insurance process by gathering relevant information about the applicant. This information helps underwriters evaluate the risk associated with insuring a particular individual. One of the key goals of field underwriting is to avoid adverse selection, which occurs when individuals who are at higher risk are more likely to seek insurance. By collecting detailed information on factors like health history, lifestyle choices, and other relevant data, field underwriting allows insurance companies to make informed decisions about coverage and premiums.

This process ensures that the risk pool is balanced and that policyholders are accurately assessed according to their risk levels. Consequently, effective field underwriting contributes to the overall stability and profitability of the insurance company by preventing situations where too many high-risk individuals enter the pool without proper assessment.