Each insurance company employs underwriting staff who are responsible for investigating the factors affecting the probability of loss and the costs that the insurance company may have to pay out to the policyholder or a third party (an individual other than the policyholder or the insurance company who has suffered a loss and may be able to collect compensation under the policy). Underwriters have a wealth of statistical information, and it is from this that they calculate the likely risk and cost of insuring a particular individual.
