What does "underwriting" in insurance typically involve?

Underwriting in insurance is a critical function that involves evaluating the risk associated with insuring an individual or entity. This evaluation is used to determine whether to accept the application for insurance coverage and to establish appropriate premium rates based on that assessed risk. Underwriters analyze various factors, including the applicant's health history, financial stability, and any potential hazards associated with the insured object or person. This process ensures that the insurance company can set premiums that reflect the level of risk they are taking on, thereby maintaining their financial stability and ability to pay claims.

The other choices do not accurately reflect the core activities involved in underwriting. Selling insurance policies pertains to the sales process, while filing claims relates to claims handling after policies have been sold. Marketing strategies focus on how insurance companies promote their products, which is separate from risk assessment and premium determination.