Underwriting and the Selection of a Liability Portfolio

  • Bernard Benjamin


The purpose of underwriting is to choose to cover, from all the risks which are proposed to the insurer, those which collectively will be profitable. Essentially, this means that probable claims and the associated handling expenses will be less than the technical reserves held against those claims, so that the proportion of the premium income remaining after providing for these reserves (together with any investment income from the reserves) is available for profit.


Portfolio Selection Total Profit Claim Amount Operating Profit Investment Income 
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  1. Benjamin, B. (1977) General Insurance (London: Heinemann).Google Scholar
  2. Berliner, B. (1982) Limits of Insurability of Risk (Englewood Cliffs, NJ: Prentice-Hall).Google Scholar
  3. Carter, R.L. (ed.) (1973) Handbook of Insurance (Brentford: Kluwer Publishing) (continuously updated).Google Scholar
  4. Coe, L.D. (1978) ‘Optimisation by the Use of Linear Programming’ (unpublished).Google Scholar
  5. Diacon, S.R. and R.L. Carter (1988) Success in Insurance (London: John Murray) 2nd edn.Google Scholar

Copyright information

© Stephen Diacon 1990

Authors and Affiliations

  • Bernard Benjamin

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