Underwriting Income Law and Legal Definition

Underwriting income is the amount of income an insurance company generates. It is the profits generated from premiums in relation to the cost of settling claims. It is calculated as the difference between premiums earned and all losses, costs, and dividends paid when settling claims. [Fire Ass'n of Philadelphia v. U. S., 207 F.2d 606 (3d Cir. Pa. 1953)]

For instance, if a company generates $10,000,000 in revenue from premiums and spends $6,000,000 settling claims, its underwriting income is $4,000,000.