cash flow underwriting

Definition

One method of generating cash that insurance companies use to better match insurance premiums to interest rates. This is done by discounting the insurance product below its true worth and using the funds generated to invest in financial instruments that earn a higher return than the original costs of the instrument. Sometimes insurance firms will do this for client firms that fail to qualify based on the typical insurance company's standards.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
cash flow to capital expenditures (CF to CAPEX) cash flows from financing activities