In underwriting, which term refers to the assessment of risk factors before granting insurance coverage?

The term that refers to the assessment of risk factors before granting insurance coverage is "risk assessment." This process is fundamental to underwriting, as it involves evaluating various factors that may influence the likelihood of a loss occurring, such as the applicant's history, the type of coverage requested, and other relevant data. By analyzing these risk factors, underwriters can determine the appropriate premium to charge, the terms of coverage, and whether to accept or reject the application altogether.

Risk assessment provides insurers with a systematic approach to identify and prioritize the risks associated with a particular insurance policy. This assessment not only helps in making informed decisions but also plays a crucial role in maintaining the overall financial stability of the insurance company by ensuring that risks are appropriately priced and managed.