What does 'claims history' imply in the context of underwriting?

In the context of underwriting, 'claims history' refers specifically to a review of past insurance claims made by the applicant. When underwriters evaluate an individual's claims history, they are looking to determine how reliable or risky that applicant might be. This analysis is crucial because it helps underwriters assess the likelihood of future claims based on historical data. If an applicant has a history of frequent or severe claims, they may be viewed as a higher risk, which can ultimately influence the underwriting decision and even the premium rates.

The focus on the individual's past claims rather than the overall trends among policyholders or predictions about future claims makes this choice the most relevant. By concentrating on the applicant's specific claims record, underwriters can make informed decisions that balance the insurer's risk with the applicant's insurability, thereby facilitating a more accurate underwriting process.