Preview Questions Underwriter | Role Specific Skill

Question 1: When evaluating a company's financial ratios, how does an underwriter assess the risk of default for a corporate borrower?

Which action should you take?

Choose only one option

By analyzing the company's liquidity, solvency, and profitability ratios

By evaluating the company's dividend payout history

By focusing on the company's revenue growth rate

By comparing the company's financial ratios with industry benchmarks

Question 2: What is the key consideration when reviewing a health insurance policy for underwriting decisions?

Which action should you take?

Choose only one option

Ensuring the policy offers the highest level of coverage possible

Ensuring that the policy covers all essential medical services while aligning with risk tolerance

Determining the client's age and occupation as the only factors

Focusing solely on the client's premium payment history

Question 3: When reviewing an automobile insurance policy for a business, how should an underwriter address liability concerns?

Which action should you take?

Choose only one option

By evaluating the risk of accidents, the number of vehicles insured, and the type of business operations

By focusing only on the type of vehicles owned by the business

By reviewing the employee driving history only

By ensuring that the business has not filed claims in the past

Question 4: In cases where an insurance company is under investigation for non-compliance with regulations, what is an underwriter's responsibility?

Which action should you take?

Choose only one option

Avoid involvement and refer to senior management for guidance

Continue underwriting new policies as usual

Maintain the status quo and avoid taking any further action

Report any potential breaches to the compliance department and cooperate with the investigation

Question 5: For underwriting high-risk insurance policies, which financial metric is most useful in determining the premium rate?

Which action should you take?

Choose only one option

Debt-to-equity ratio

Price-to-earnings ratio

Loss ratio

Liquidity ratio

Question 6: Which of the following macroeconomic factors is most critical when performing a risk assessment for commercial loans?

Which action should you take?

Choose only one option

Size of the company's fixed assets

Borrower's personal financial status

Borrower's credit score

Industry-specific economic conditions