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Insurance Company Operations - Coggle Diagram
Insurance Company Operations
Ratemaking
Underwriting
Basic Underwriting Principles
Attain an underwriting profit.
Select prospective insureds according to the
company’s underwriting standards.
Provide equity among the policyholders.
Steps in Underwriting
Agent as First Underwriter
Sources of Underwriting Information
Application.
Agent’s report
Inspection report
Other Underwriting Considerations
Rate adequacy and underwriting
Reinsurance and underwriting
Renewal underwriting
Production
Agency Department
Professionalism in Selling
Claim settlement
Basic Objectives in Claims Settlement
Verification of a covered loss
Fair and prompt payment of claims
Personal assistance to the insured
Types of Claims Adjustors
Independent adjustor
Company adjustor
Agent
Public adjustor
Steps in Settlement of a Claim
Notice of loss must be given.
The claim is investigated
A proof of loss may be required
A decision is made concerning payment
Reinsurance
Reasons for Reinsurance
Increase underwriting capacity
Stabilize profits
Reduce the unearned premium reserve
Provide protection against a catastrophic loss
to retire from the business or a specific line of insurance or territory.
It allows the transfer of the insurer's liabilities for existing insurance to another carrier, ensuring that policyholders' coverage remains unaffected
Reinsurance provides the opportunity for an insurer to benefit from the underwriting advice and assistance of the reinsurer
Types of Reinsurance
facultative reinsurance
treaty reinsurance
Methods for Sharing Losses
excess-of-loss
pro rata
Examples
Quota-share treaty
Surplus-share treaty
Excess-of-loss reinsurance
Reinsurance pool
Investments
Life Insurance Investments
Property and Casualty Insurance Investments
investment income is extremely important
in offsetting unfavorable property and casualty underwriting experience
generally are short-term in nature
Alternatives to Traditional Reinsurance
Securitization of Risk
catastrophe bond
futures contract
options contract
Other Insurance company Functions
Information systems
Accounting
Legal Function
Loss-Control Services