A financial institution or individual that assumes the risk of purchasing and reselling securities, or that guarantees payment in case of loss or damage. In securities offerings, underwriters help companies go public by purchasing shares and selling them to investors, often guaranteeing a minimum price.
From the practice of writing one's name under the terms of a risk contract, literally 'under-writing.' Originated in 17th-century Lloyd's of London insurance market, where individuals would sign their names beneath marine insurance policies to indicate their willingness to assume specific portions of risk.
Underwriters are basically professional risk-takers who bet their own money that they can sell your company's stock to other people! In insurance, they're the people who decide whether you're too risky to insure, while in finance, they're the bridge between companies needing money and investors wanting opportunities.
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