General Insurance 🏠

Key features

Short term

Multiple claims

Claim amounts volatile & unknown

Delays (reporting & settling)==> Tail

Two main categories

Personal Lines

Commercial lines

Underwriting

Process

Peril>>Risk factor>> Rating factor>> Exposure>> Quote

Rating factors

Exposure

Allows for comparison of policies

Proportional to value of risk & time period involved

Key examples

Sex

Age

Car type

Location

Contract design

Premium setting

Risk premium= Exp. claim frequency X Exp. cost per claim

Competitive

Subsidise new business with renewal

Provisions

Outstanding reported claims

IBNR

Unexpired risk reserve

Catastrophe reserve

Claims handling expense

Investment strategy

Cash (liquidity)

Domestic & overseas currency

Short term

Fixed interest bonds

Real assets

Constraints

Tax efficiency

Regulation

Free assets

Key risks

Claim frequency, amount, volatility, delays

Accumulations

Investment risks

Expenses

Poor persistency

New business strain

Credit risk

Operational risks

Mitigation

Limits

Excess

No claims discount

Exclusions

Loyalty programme

Underwriting

Reinsurance

Low risk target market

Types of General insurance

Liability

Property damage

Financial loss

Fixed benefit

Employers'

Public

Product

Professional

Motor third party

Buildings

Moveable

Motor

Marine

Percuniary loss

Fidelity guarantee

Business interruption cover

Personal accident

Health insurance

Unemployment