Underwriting definition

The process of selling stocks or debt offerings to the public. Investment bankers provide underwriting services and in return charge a fee, which is a small percentage amount of the amount of funds raised. Underwriters form a syndicate group comprised of other investment banks in order to jointly share in the underwriting risk and sales effort of distributing a new debt or equity issue.

In the insurance industry, agreeing to undertake a risk in exchange for earning a fee.