insurance company functions n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Insurance Company: Functions PowerPoint Presentation
Download Presentation
Insurance Company: Functions

Loading in 2 Seconds...

play fullscreen
1 / 12
annabella-oral

Insurance Company: Functions - PowerPoint PPT Presentation

88 Views
Download Presentation
Insurance Company: Functions
An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Insurance Company: Functions Chapter 7

  2. Insurance related functions • Ratemaking • Production • Underwriting • Loss adjustment • Investment • Reinsurance • Accounting, Compliance

  3. Expense and loss ratios • Expense ratio = underwriting expenses as a percent of premiums • 1-expense ratio=permissible loss ratio • Pure premium = expected loss payments • Gross rate = pure premium/(1-expense ratio)

  4. Classification of rating methods • Class • Individual • Judgment • Schedule (blue book approach) • Experience rating • Retrospective rating

  5. Information used in underwriting • The application • External information • Information from broker/agent • Credit reports • Medical exam • Information bureaus • Post selection underwriting • Legal restrictions

  6. Loss Adjustment • Problems in property-liability insurance • Coverage questions • Value of damages • Adjusters • Staff adjuster • Independent adjuster • Public adjuster

  7. Investments • Restrictions in risk taking • Tax considerations • Combined ratio and cash flow underwriting • Conceptual treatment of investment income

  8. Statutory Accounting • More conservative than GAAP • Market value for bonds and stock • Admitted and non-admitted assets • Reserves (liability accounts)

  9. Reserves • Unearned premium reserve • Loss reserves • Incurred but not paid • IBNR • Hidden equity in reserves

  10. Reinsurance • Ceding company and reinsurer • Reinsurance as a “source” of capital • Facultative and automatic • Proportional reinsurance • Quota share (Co-insurance) • Surplus line • Excess loss reinsurance (Deductible) • Pooling

  11. Alternatives to reinsurance • Cat bonds • Catastrophe futures and options • Catex

  12. Taxation • State premium tax • Income tax • Reserving • Tax-exempt bonds