What is the primary objective of underwriting in auto insurance?

The primary objective of underwriting in auto insurance is to assess risk and set appropriate pricing. Underwriting involves evaluating the potential risk associated with insuring an individual or business. Underwriters analyze various factors such as the applicant's driving history, the type of vehicle being insured, and the geographic location where the vehicle is used.

This process is essential because it helps insurers determine how likely it is that a claim will be made and how much that claim might cost. By accurately assessing risk, underwriters can establish premiums that are commensurate with the level of risk presented. This ensures that the insurance company remains financially viable while providing coverage that is fair to policyholders based on their unique risks.

The other choices do not encompass the core function of underwriting. Increasing premiums, for instance, may be a result of underwriting decisions but is not the objective itself. Managing customer service requests and creating marketing strategies, while important parts of an insurance business, are separate from the underwriting process's critical role in risk assessment and pricing.