underwriter investment & finance definition

An investment bank that acts as an intermediary between a company that wants to sell bonds or stocks and the public. Firm-commitment underwriting, which is done only for an underwriter’s best clients, occurs when the underwriter buys the issue and guarantees to sell a certain number of shares to investors. In order to spread the risk of purchasing the issue, the underwriter forms a syndicate, or underwriting group, made up of other investment banks. In insurance, an underwriter assumes the risks for a variety of problems such as car accidents, health problems, or death, in return for receiving premiums.