This document provides an overview of reinsurance. It defines reinsurance as a transaction where one insurance company agrees to indemnify another for part or all of the losses incurred under the policies it has issued. The key purposes of reinsurance are risk transfer and spreading, increasing capacity and stability. Reinsurance can be bought by various entities including insurance companies, Lloyd's syndicates, and captives. It also describes the main types of reinsurance as facultative and treaty, as well as proportional and non-proportional methods. Examples are given to illustrate quota share and excess of loss structures.
This document provides an introduction and overview of key concepts in reinsurance. It defines reinsurance as a form of insurance where one insurer takes on risks ceded from another insurer. There are two main types of reinsurance treaties - pro rata, where risks and premiums are shared proportionally, and excess of loss, where the reinsurer is liable for losses over a predetermined retention amount. The document outlines the language, participants, methods, pricing and contract elements of reinsurance agreements.
The document provides an introduction to key concepts and terminology in insurance law, including the definition of risk, risk management, insurance terminology such as policies and premiums, the concept of risk pooling, classifications of insurance, and the requirement of insurable interest. It also summarizes the nature of insurance contracts as governed by contract law and regulated by states, how applications and provisions work, and types of defenses insurers can raise.
Chapter 01 concepts and principles of insuranceiipmff2
The document defines insurance as a social device where individuals transfer risk to an insurer who pools losses to make statistical predictions and provide payments from premium contributions. Legally, it is a contract where an insurer provides security to an insured against specified events in exchange for a premium proportionate to the risk. Key elements are risk transfer from insured to insurer, insurance as a business to meet costs and make profit, and an insurance contract as a legally enforceable agreement. Fundamental principles include utmost good faith, indemnity, subrogation, contribution, and proximate cause. There are various types of insurance and governing laws regulate the insurance sector in India.
The document discusses the key objectives and process of underwriting in the insurance industry. It provides definitions of underwriting as examining and classifying risks to determine appropriate premiums. The objectives are outlined as providing equitable, profitable and deliverable insurance policies. Key aspects covered include risk factors considered, principles of utmost good faith and moral hazard, types of underwriters and their roles, and importance of sound underwriting. Rules for application forms and documentation requirements are also summarized.
This document provides an overview of insurance and risk. It defines insurance as the pooling of fortuitous losses among a group to spread risk. Key points covered include the characteristics of an insurable risk, how insurance differs from gambling and hedging, the types of private and government insurance, and the social benefits and costs of insurance.
The document summarizes property insurance, including that it provides protection against risks like fire, theft, and weather damage. It describes the main types of property insurance like home insurance and discusses what is covered (e.g. theft protection, home replacement) and perils covered (e.g. lightning, explosion). It also outlines exclusions like war damage and how to promote property insurance through community meetings, brochures, and seminars. In conclusion, it finds that many apartments are underinsured and lack security, with fire being a main peril.
This document discusses key concepts related to life insurance premiums, including:
- Premium components include interest, expenses, mortality, benefits, bonus loading, taxation, and inflation.
- There are different types of premiums such as risk premium, net premium, and office premium. Premium calculation is complex and involves actuarial and statistical principles.
- Insurers establish a life fund to hold all income from life insurance policies to exclusively meet liabilities and claims expenses.
- Insurers conduct annual actuarial valuations to ensure assumptions about mortality, interest, and expenses are valid and the business remains financially sound. Bonus may be distributed if valuations show surplus funds.
This document provides an introduction and overview of key concepts in reinsurance. It defines reinsurance as a form of insurance where one insurer takes on risks ceded from another insurer. There are two main types of reinsurance treaties - pro rata, where risks and premiums are shared proportionally, and excess of loss, where the reinsurer is liable for losses over a predetermined retention amount. The document outlines the language, participants, methods, pricing and contract elements of reinsurance agreements.
The document provides an introduction to key concepts and terminology in insurance law, including the definition of risk, risk management, insurance terminology such as policies and premiums, the concept of risk pooling, classifications of insurance, and the requirement of insurable interest. It also summarizes the nature of insurance contracts as governed by contract law and regulated by states, how applications and provisions work, and types of defenses insurers can raise.
Chapter 01 concepts and principles of insuranceiipmff2
The document defines insurance as a social device where individuals transfer risk to an insurer who pools losses to make statistical predictions and provide payments from premium contributions. Legally, it is a contract where an insurer provides security to an insured against specified events in exchange for a premium proportionate to the risk. Key elements are risk transfer from insured to insurer, insurance as a business to meet costs and make profit, and an insurance contract as a legally enforceable agreement. Fundamental principles include utmost good faith, indemnity, subrogation, contribution, and proximate cause. There are various types of insurance and governing laws regulate the insurance sector in India.
The document discusses the key objectives and process of underwriting in the insurance industry. It provides definitions of underwriting as examining and classifying risks to determine appropriate premiums. The objectives are outlined as providing equitable, profitable and deliverable insurance policies. Key aspects covered include risk factors considered, principles of utmost good faith and moral hazard, types of underwriters and their roles, and importance of sound underwriting. Rules for application forms and documentation requirements are also summarized.
This document provides an overview of insurance and risk. It defines insurance as the pooling of fortuitous losses among a group to spread risk. Key points covered include the characteristics of an insurable risk, how insurance differs from gambling and hedging, the types of private and government insurance, and the social benefits and costs of insurance.
The document summarizes property insurance, including that it provides protection against risks like fire, theft, and weather damage. It describes the main types of property insurance like home insurance and discusses what is covered (e.g. theft protection, home replacement) and perils covered (e.g. lightning, explosion). It also outlines exclusions like war damage and how to promote property insurance through community meetings, brochures, and seminars. In conclusion, it finds that many apartments are underinsured and lack security, with fire being a main peril.
This document discusses key concepts related to life insurance premiums, including:
- Premium components include interest, expenses, mortality, benefits, bonus loading, taxation, and inflation.
- There are different types of premiums such as risk premium, net premium, and office premium. Premium calculation is complex and involves actuarial and statistical principles.
- Insurers establish a life fund to hold all income from life insurance policies to exclusively meet liabilities and claims expenses.
- Insurers conduct annual actuarial valuations to ensure assumptions about mortality, interest, and expenses are valid and the business remains financially sound. Bonus may be distributed if valuations show surplus funds.
Watch full video on link given below-
https://youtu.be/jPZpvgUSL2Q
Motor Vehicle Insurance is the insurance coverage of risk arising out of the use of motor vehicle such as car, truck or other vehicles causing damage and loss to oneself as well as other’s property in an accident.
Motor Insurance is mandatory as per the Motor Vehicles Act passed in the year 1938 and subsequently amended.
Motor Insurance provides coverage related to property damage, bodily injury, medical expenses and any other sort of compensation in legal proceedings.
It is also referred as Auto Insurance, Vehicle Insurance and Car Insurance.
Types of Motor Insurance are -
Private Car Insurance
Commercial Vehicle Insurance
Defense Vehicle Insurance
Two Wheeler Insurance
Motor Vehicle Insurance generally comprises of following two components –
Third party liability coverage is the part of insurance policy which protects you in case you are sued or asked compensation for any physical injury or damage to someone else’s property by your vehicle accidently.
Third party liability could be of following nature – Bodily injury liability and Property damage liability.
Factors affecting premium of Insurance Policy-
Type of vehicle
Physical condition of driver
Geographical area of use
Age of vehicle
Losses Covered under Motor Insurance -
Loss or damage by accident, fire, lightning, theft, malicious act, natural disaster
Third party liability in form of injury ,death and damage to property
Medical Expenses
Exclusions under Motor Insurance-
Normal wear and tear
Damage when person was driving without license
Damage when person was driving in influence of alcohol
Damage due to a war
Thank you for Watching
Subscribe to DevTech Finance
This document provides an overview of fundamentals of insurance. It defines insurance as a promise by an insurer to compensate for potential financial losses in exchange for periodic payments. It describes the objectives of understanding basic insurance concepts, types of risks and classifications, actuarial and underwriting functions, important terms, types of contracts, and claims processes. It also discusses the roles of actuaries, underwriters, different types of insurance policies and contracts, insurable interests, risk management techniques, and the responsibilities of insurance agents.
This document discusses the key principles of insurance. It defines insurance as a form of risk management that involves the equitable transfer of risk from one entity to another in exchange for payment. The main entities in an insurance agreement are the insurer, who sells the insurance, and the insured, who buys the insurance policy. Premiums are the amounts charged for a certain level of insurance coverage. Several acts govern insurance in India. The document also discusses insurable risks, types of insurance, fundamental insurance principles like indemnity and insurable interest, and circumstances under which an insurer must return paid premiums.
Sharing with you my dear readers who may find it useful.
Feel free to connect with me at maxermesilliam@gmail.com.
P/S: taken the insurance exam but has yet to practice as an insurance agent.
This document discusses displaced commercial risk in Islamic finance. It defines displaced commercial risk as the risk resulting from volatility in returns generated by assets financed by investment accounts, which can cause Islamic banks to not pay competitive rates compared to conventional banks. The document outlines ways Islamic banks can manage this risk, including using profit equalization reserves and investment risk reserves. It also discusses the impact of displaced commercial risk mitigation on Islamic banks and their customers and the overall economy.
A credit default swap is a contract where a buyer pays a seller a periodic fee in exchange for a payout if a third party defaults on its debt obligations. For example, if party A lends to party B, party A can buy a CDS from party C to insure against party B's default. If party B defaults, party C pays party A instead of party B. CDS contracts transfer credit risk from one party to another and resemble insurance policies against borrower defaults.
Risk is the possibility of a loss or an unfavorable outcome affecting an individual's or organization's financial state. Insurance provides compensation for losses to transfer risk. There are different ways to deal with risk including avoiding, reducing, ignoring, or transferring it. Probability can be determined a priori, empirically based on historical data, or through judgement. Risks can be fundamental to society or particular to individuals and organizations. They can also be pure risks involving only possibilities of loss or gain, or speculative risks involving profit. Common types of pure risks include personal health and financial risks, property damage risks, and legal liability risks.
This document provides an overview of different types of common insurance policies. It defines insurance as an arrangement between an individual and insurer to protect against risk of financial loss. The main types of insurance discussed are automobile, health, life, disability, and homeowners insurance. For each type, key details are provided such as typical coverage, purpose, and importance. The summary restates that insurance helps limit financial losses from accidents by defining premiums as fees paid to insurers and deductibles as out-of-pocket amounts before coverage begins.
The document discusses the process of insurance underwriting. Underwriting involves evaluating risks to determine whether to issue an insurance policy to an applicant. It aims to select applicants that will likely have claims below assumed losses to ensure a profit. The underwriter considers the applicant's exposure, pricing alternatives like modifying coverage, and monitors policies to maintain satisfactory results for the insurance company. Underwriting balances risks across policyholders and ensures adequate premiums are charged for expected losses.
This document discusses key principles of insurance, including insurable interest, subject matter of insurance, assignment of policies, utmost good faith, proximate cause, indemnity, subrogation, and contribution. It defines these terms and explains concepts like when insurable interest must exist, exceptions to free assignment of policies, the duration of utmost good faith, factors limiting indemnity, and conditions required for contribution between insurers.
This document discusses the principles and process of underwriting in insurance. It defines underwriting as assessing and selecting risks to determine premiums, terms, and conditions. The key purposes of underwriting are to guard against applicants with high probability of loss and to charge premiums commensurate with risk. Common underwriting features include identifying hazards, selecting risks, and setting premiums, terms, and conditions accordingly. Risks with abnormal hazards may be accepted with risk improvements, warranties, exclusions, restricted coverage, excesses, or franchises. Premiums are set using individual, class, or merit rates and cover expected claims costs plus expenses.
Sbi life insurance distributuion channelsahilmonga001
This document provides a summary of a summer internship report on the hybrid distribution model of SBI Life Insurance. It includes an introduction to insurance concepts and the meaning of insurance. It then provides details about SBI Life Insurance, including that it is a joint venture between State Bank of India and Cardif SA of France. Tables and figures are included to illustrate distribution channels, market shares, and other analytical concepts discussed in the report.
Insurance protects individuals and businesses from financial loss by paying compensation for damage to or loss of valuable property and assets. It works by pooling risks among many policyholders, so that the costs of claims made by a few are shared among all. There are important principles that govern insurance, such as insurable interest, utmost good faith, indemnity, contribution, subrogation and average clauses.
This document provides an overview of insurance contracts and their importance. It defines insurance as a cooperative device to spread risk among many exposed to the same risks. An insurance contract involves one party agreeing to pay a specified sum if an event occurs, in exchange for the other party paying a premium. The document outlines key elements of insurance contracts including insurable interest, utmost good faith, indemnity, subrogation and warranties. It also discusses the history of insurance and highlights the advantages of insurance for individuals, businesses and society, such as security, protection from risk, and encouragement of savings and investment.
Property & Liability insurance involves the equitable transfer of risk, where many policyholders share the financial losses of a few through premium contributions. P&L insurance company investments total around $789 billion, with most assets invested in securities to pay claims if needed. Net premiums written for all lines were around $300 billion. P&L policies are short-term, and claims payments can vary greatly depending on catastrophes. Various rating systems like schedule, experience and retrospective ratings adjust premiums based on risk factors of individual policies.
Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters
Risks which are not capable of avoidance, prevention, reduction to a large extent or assumption may be transferred from one party to the other party. The basic objective of insurance is to transfer the risk of a person to the insurance company which has easily spread it over a large number of persons insuring similar risks. As such, for handling risks which involve large financial losses or which are dangerous, insurance is a means of shifting such risks in consideration of a nominal cost called premium.
Fire insurance protects people from financial losses caused by fires. It involves sharing fire-related losses incurred by some through contributions to a common fund by all who are exposed to fire risk. Fire insurance pays for losses that are unexpected and occur due to chance. It aims to restore the insured's financial position prior to the loss through the principle of indemnity.
This document discusses liquidity risk in Islamic finance. It defines liquidity risk as a bank's potential inability to meet short-term financial demands due to difficulties liquidating assets. For Islamic banks, liquidity risk is critical as they cannot borrow funds through interest or sell debt assets. The document identifies two types of liquidity risk - funding liquidity, which is the inability to raise funds for business growth, and market liquidity, which is the inability to liquidate assets quickly. It also discusses causes of liquidity risk for Islamic banks like limited Sharia-compliant money markets and differences in Islamic legal interpretations. The document recommends mitigation strategies like risk dispersal and a diversified portfolio, and notes IFSB guiding principles
This chapter discusses risk and return, including:
- Risk and return of individual assets is measured using probability distributions and expected return and standard deviation.
- Portfolio risk is lower than holding individual assets due to diversification. Beta measures the sensitivity of an asset's return to market movements.
- The Security Market Line shows the expected return of an asset based on its beta and the risk-free rate. The Capital Asset Pricing Model suggests assets should be priced based on their systematic risk.
This document provides an overview of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. It defines key terms including provisions, present obligations, past events, and probable outflows. It discusses the recognition and measurement of provisions, contingent liabilities, and contingent assets. Examples are provided for applying the standard to issues like warranties, legal claims, and restructuring plans. The document concludes with exercises assessing various scenarios in light of IAS 37 requirements.
Basics of Reinsurance, Types, Purposes, Advantages and DisadvantagesPrashantRajNeupane1
This document provides an overview of reinsurance presented by Trust Insurance Brokers Pvt. Ltd. It defines reinsurance as insurance for insurance companies and transfers part of insured risks to a reinsurer. The main reasons for reinsurance are to limit annual loss fluctuations, protect against catastrophes, and maintain solvency. The presentation describes the advantages of reinsurance for both primary insurers and reinsurers. It also outlines the different types of reinsurance including facultative, obligatory, proportional, and non-proportional. Key terms like premiums, treaties, and regulatory requirements are also summarized.
This document outlines key aspects of reinsurance. It begins by defining reinsurance as the transfer of insurance risks from insurance companies to other insurers through contracts. It then discusses the main types of reinsurance: compulsory, optional, and contractual. Next, it lists the main components of a reinsurance contract, such as the original insurer, reinsurer, assigned quota, and reinsurance commission. It also covers some common roles in reinsurance like brokers. Finally, it discusses the importance of reinsurance in stabilizing loss rates, supporting companies in accepting large risks, and helping distribute losses.
Watch full video on link given below-
https://youtu.be/jPZpvgUSL2Q
Motor Vehicle Insurance is the insurance coverage of risk arising out of the use of motor vehicle such as car, truck or other vehicles causing damage and loss to oneself as well as other’s property in an accident.
Motor Insurance is mandatory as per the Motor Vehicles Act passed in the year 1938 and subsequently amended.
Motor Insurance provides coverage related to property damage, bodily injury, medical expenses and any other sort of compensation in legal proceedings.
It is also referred as Auto Insurance, Vehicle Insurance and Car Insurance.
Types of Motor Insurance are -
Private Car Insurance
Commercial Vehicle Insurance
Defense Vehicle Insurance
Two Wheeler Insurance
Motor Vehicle Insurance generally comprises of following two components –
Third party liability coverage is the part of insurance policy which protects you in case you are sued or asked compensation for any physical injury or damage to someone else’s property by your vehicle accidently.
Third party liability could be of following nature – Bodily injury liability and Property damage liability.
Factors affecting premium of Insurance Policy-
Type of vehicle
Physical condition of driver
Geographical area of use
Age of vehicle
Losses Covered under Motor Insurance -
Loss or damage by accident, fire, lightning, theft, malicious act, natural disaster
Third party liability in form of injury ,death and damage to property
Medical Expenses
Exclusions under Motor Insurance-
Normal wear and tear
Damage when person was driving without license
Damage when person was driving in influence of alcohol
Damage due to a war
Thank you for Watching
Subscribe to DevTech Finance
This document provides an overview of fundamentals of insurance. It defines insurance as a promise by an insurer to compensate for potential financial losses in exchange for periodic payments. It describes the objectives of understanding basic insurance concepts, types of risks and classifications, actuarial and underwriting functions, important terms, types of contracts, and claims processes. It also discusses the roles of actuaries, underwriters, different types of insurance policies and contracts, insurable interests, risk management techniques, and the responsibilities of insurance agents.
This document discusses the key principles of insurance. It defines insurance as a form of risk management that involves the equitable transfer of risk from one entity to another in exchange for payment. The main entities in an insurance agreement are the insurer, who sells the insurance, and the insured, who buys the insurance policy. Premiums are the amounts charged for a certain level of insurance coverage. Several acts govern insurance in India. The document also discusses insurable risks, types of insurance, fundamental insurance principles like indemnity and insurable interest, and circumstances under which an insurer must return paid premiums.
Sharing with you my dear readers who may find it useful.
Feel free to connect with me at maxermesilliam@gmail.com.
P/S: taken the insurance exam but has yet to practice as an insurance agent.
This document discusses displaced commercial risk in Islamic finance. It defines displaced commercial risk as the risk resulting from volatility in returns generated by assets financed by investment accounts, which can cause Islamic banks to not pay competitive rates compared to conventional banks. The document outlines ways Islamic banks can manage this risk, including using profit equalization reserves and investment risk reserves. It also discusses the impact of displaced commercial risk mitigation on Islamic banks and their customers and the overall economy.
A credit default swap is a contract where a buyer pays a seller a periodic fee in exchange for a payout if a third party defaults on its debt obligations. For example, if party A lends to party B, party A can buy a CDS from party C to insure against party B's default. If party B defaults, party C pays party A instead of party B. CDS contracts transfer credit risk from one party to another and resemble insurance policies against borrower defaults.
Risk is the possibility of a loss or an unfavorable outcome affecting an individual's or organization's financial state. Insurance provides compensation for losses to transfer risk. There are different ways to deal with risk including avoiding, reducing, ignoring, or transferring it. Probability can be determined a priori, empirically based on historical data, or through judgement. Risks can be fundamental to society or particular to individuals and organizations. They can also be pure risks involving only possibilities of loss or gain, or speculative risks involving profit. Common types of pure risks include personal health and financial risks, property damage risks, and legal liability risks.
This document provides an overview of different types of common insurance policies. It defines insurance as an arrangement between an individual and insurer to protect against risk of financial loss. The main types of insurance discussed are automobile, health, life, disability, and homeowners insurance. For each type, key details are provided such as typical coverage, purpose, and importance. The summary restates that insurance helps limit financial losses from accidents by defining premiums as fees paid to insurers and deductibles as out-of-pocket amounts before coverage begins.
The document discusses the process of insurance underwriting. Underwriting involves evaluating risks to determine whether to issue an insurance policy to an applicant. It aims to select applicants that will likely have claims below assumed losses to ensure a profit. The underwriter considers the applicant's exposure, pricing alternatives like modifying coverage, and monitors policies to maintain satisfactory results for the insurance company. Underwriting balances risks across policyholders and ensures adequate premiums are charged for expected losses.
This document discusses key principles of insurance, including insurable interest, subject matter of insurance, assignment of policies, utmost good faith, proximate cause, indemnity, subrogation, and contribution. It defines these terms and explains concepts like when insurable interest must exist, exceptions to free assignment of policies, the duration of utmost good faith, factors limiting indemnity, and conditions required for contribution between insurers.
This document discusses the principles and process of underwriting in insurance. It defines underwriting as assessing and selecting risks to determine premiums, terms, and conditions. The key purposes of underwriting are to guard against applicants with high probability of loss and to charge premiums commensurate with risk. Common underwriting features include identifying hazards, selecting risks, and setting premiums, terms, and conditions accordingly. Risks with abnormal hazards may be accepted with risk improvements, warranties, exclusions, restricted coverage, excesses, or franchises. Premiums are set using individual, class, or merit rates and cover expected claims costs plus expenses.
Sbi life insurance distributuion channelsahilmonga001
This document provides a summary of a summer internship report on the hybrid distribution model of SBI Life Insurance. It includes an introduction to insurance concepts and the meaning of insurance. It then provides details about SBI Life Insurance, including that it is a joint venture between State Bank of India and Cardif SA of France. Tables and figures are included to illustrate distribution channels, market shares, and other analytical concepts discussed in the report.
Insurance protects individuals and businesses from financial loss by paying compensation for damage to or loss of valuable property and assets. It works by pooling risks among many policyholders, so that the costs of claims made by a few are shared among all. There are important principles that govern insurance, such as insurable interest, utmost good faith, indemnity, contribution, subrogation and average clauses.
This document provides an overview of insurance contracts and their importance. It defines insurance as a cooperative device to spread risk among many exposed to the same risks. An insurance contract involves one party agreeing to pay a specified sum if an event occurs, in exchange for the other party paying a premium. The document outlines key elements of insurance contracts including insurable interest, utmost good faith, indemnity, subrogation and warranties. It also discusses the history of insurance and highlights the advantages of insurance for individuals, businesses and society, such as security, protection from risk, and encouragement of savings and investment.
Property & Liability insurance involves the equitable transfer of risk, where many policyholders share the financial losses of a few through premium contributions. P&L insurance company investments total around $789 billion, with most assets invested in securities to pay claims if needed. Net premiums written for all lines were around $300 billion. P&L policies are short-term, and claims payments can vary greatly depending on catastrophes. Various rating systems like schedule, experience and retrospective ratings adjust premiums based on risk factors of individual policies.
Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters
Risks which are not capable of avoidance, prevention, reduction to a large extent or assumption may be transferred from one party to the other party. The basic objective of insurance is to transfer the risk of a person to the insurance company which has easily spread it over a large number of persons insuring similar risks. As such, for handling risks which involve large financial losses or which are dangerous, insurance is a means of shifting such risks in consideration of a nominal cost called premium.
Fire insurance protects people from financial losses caused by fires. It involves sharing fire-related losses incurred by some through contributions to a common fund by all who are exposed to fire risk. Fire insurance pays for losses that are unexpected and occur due to chance. It aims to restore the insured's financial position prior to the loss through the principle of indemnity.
This document discusses liquidity risk in Islamic finance. It defines liquidity risk as a bank's potential inability to meet short-term financial demands due to difficulties liquidating assets. For Islamic banks, liquidity risk is critical as they cannot borrow funds through interest or sell debt assets. The document identifies two types of liquidity risk - funding liquidity, which is the inability to raise funds for business growth, and market liquidity, which is the inability to liquidate assets quickly. It also discusses causes of liquidity risk for Islamic banks like limited Sharia-compliant money markets and differences in Islamic legal interpretations. The document recommends mitigation strategies like risk dispersal and a diversified portfolio, and notes IFSB guiding principles
This chapter discusses risk and return, including:
- Risk and return of individual assets is measured using probability distributions and expected return and standard deviation.
- Portfolio risk is lower than holding individual assets due to diversification. Beta measures the sensitivity of an asset's return to market movements.
- The Security Market Line shows the expected return of an asset based on its beta and the risk-free rate. The Capital Asset Pricing Model suggests assets should be priced based on their systematic risk.
This document provides an overview of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. It defines key terms including provisions, present obligations, past events, and probable outflows. It discusses the recognition and measurement of provisions, contingent liabilities, and contingent assets. Examples are provided for applying the standard to issues like warranties, legal claims, and restructuring plans. The document concludes with exercises assessing various scenarios in light of IAS 37 requirements.
Basics of Reinsurance, Types, Purposes, Advantages and DisadvantagesPrashantRajNeupane1
This document provides an overview of reinsurance presented by Trust Insurance Brokers Pvt. Ltd. It defines reinsurance as insurance for insurance companies and transfers part of insured risks to a reinsurer. The main reasons for reinsurance are to limit annual loss fluctuations, protect against catastrophes, and maintain solvency. The presentation describes the advantages of reinsurance for both primary insurers and reinsurers. It also outlines the different types of reinsurance including facultative, obligatory, proportional, and non-proportional. Key terms like premiums, treaties, and regulatory requirements are also summarized.
This document outlines key aspects of reinsurance. It begins by defining reinsurance as the transfer of insurance risks from insurance companies to other insurers through contracts. It then discusses the main types of reinsurance: compulsory, optional, and contractual. Next, it lists the main components of a reinsurance contract, such as the original insurer, reinsurer, assigned quota, and reinsurance commission. It also covers some common roles in reinsurance like brokers. Finally, it discusses the importance of reinsurance in stabilizing loss rates, supporting companies in accepting large risks, and helping distribute losses.
This document discusses reinsurance contracts that life insurance companies can use to mitigate risk. It describes different types of reinsurance contracts, including quota share reinsurance where claims are shared proportionally, and surplus reinsurance where the reinsurer pays claims above an agreed amount. The document also discusses how reinsurance allows insurers to comply with solvency regulations by reducing risk exposure, and how diversifying reinsurance among multiple companies can help mitigate the risk of a single reinsurer defaulting, though reinsurers still face common risks.
Insurance companies face various risks including technical risk from inaccurate risk assessment, credit risk from policyholder loans, market risk from investments, and operational risks. They assess and mitigate risks through techniques like reinsurance, hedging, controlling large losses, and smoothing results. Regulations require controls for higher risk customers and transactions to prevent money laundering and terrorism financing. Risk management aims to allocate capital proportionate to risks for consistent returns.
Reinsurance involves insurers transferring portions of risk portfolios to other insurers through agreements to reduce the likelihood of paying out large insurance claims. This allows insurers to remain solvent by recovering amounts paid to claimants. It also increases insurers' underwriting capacity and provides catastrophe protection from large losses. There are different types of reinsurance treaties like proportional, non-proportional, and excess loss. Reinsurance risk refers to the risk that a ceding insurer is unable to obtain reinsurance at the right time or cost, and includes residual insurance risk, legal risks, counterparty risk, liquidity risk, and operational risk.
Diminishing limit policies, which count defense costs against the policy's liability limit, create challenges for insurers, defense counsel, and policyholders. They require insurers to carefully handle claims to avoid exhausting limits and expose them to bad faith claims. Defense counsel may face conflicts of interest as their duty is to the policyholder but costs hurt limits. Policyholders need frequent updates on remaining limits as multiple claims could exhaust aggregate coverage. Insurance agents must ensure clients understand these risks when purchasing diminishing limit policies.
Learning About Your Insurance Policy.pdfIGI general
The document discusses the key components of an insurance policy, including:
- The declarations page that specifies the insured, risks covered, policy limits, and duration.
- The insuring agreement that lists what is covered and the insurer's guarantees to pay damages for covered risks.
- Exclusions that list risks, losses, or assets not covered by the policy.
- Conditions that limit the insurer's obligations and require steps like submitting proof of loss.
- Definitions that explain important terms used in the policy.
- Riders and endorsements that can modify the original policy when renewed. Thoroughly reviewing all components helps policyholders understand their obligations and coverage.
- Small and large businesses are increasingly forming "profit center captives" as a way to profit from risk by selling insurance products like warranties to their customers.
- Large companies like Verizon and Walmart have been successfully selling insurance products to customers for years, realizing new profits. These small insurance programs within larger companies are called "profit center captives".
- Profit center captives allow companies to take on third-party risks from customers or other external parties, converting those premiums paid into new revenue streams and profits for the company. They provide benefits like strengthening customer relationships and diversifying revenue.
Reinsurance involves insurance companies insuring each other's risks. There are two main types of reinsurance - facultative, which applies to individual risks, and treaty, which applies to a company's entire book of business. Reinsurance can be proportional, where the reinsurer takes a share of each policy, or non-proportional, where the reinsurer covers losses over a certain amount. The reinsurance market in India is dominated by GIC, the sole domestic reinsurer, which reinsures a portion of policies with international reinsurers. Some challenges for reinsurers in the Indian market include higher premium rates and a lack of desirable quotes from Indian reinsurers for small deals.
This document provides an overview of key operations and functions within an insurance company, including ratemaking, underwriting, claims settlement, reinsurance, and investments. It discusses the roles of actuaries in determining insurance rates and reserves. It also describes the underwriting process, including evaluating applications, inspecting risks, and making acceptance decisions. Claims settlement and the different types of adjusters are also outlined. The document provides details on different types of reinsurance agreements and how losses are shared. It concludes with a discussion of investment principles for both life and property/casualty insurers.
Takaful insurance is an Islamic insurance model that operates based on mutual assistance and joint guarantee between members. Premiums paid by policyholders are considered donations into a pool that is used to safeguard members against losses. Any profits generated are shared among members rather than used to generate profits. Takaful aims to avoid elements like interest, gambling, and uncertainty that are prohibited in Islamic law. It provides various policy types like general accident, medical, and family coverage through cooperative and mutual assistance between members.
Self-Insured Retentions Part 2: An Examination of the Uses and Problems (from...NationalUnderwriter
This second and concluding part of the discussion on self-insured retentions first itemizes the points that should be
considered when either drafting or accepting SIRs. The discussion then addresses some additional problem areas not only with self-insured retentions having to do with primary liability policies, but also with the SIR feature of umbrella policies. It is not unusual, furthermore, for litigants, among others, to confuse deductibles with self-insured retentions, and there are differences, as one case discussed points out. In light of the fact that self-insured retentions also are growing, it also is important that parties to a contract are informed of their existence. To not do so, could end up with the accusation of failure to procure the proper insurance and, of course, such a breach is not covered by liability policies. It is for this reason that perhaps insurance certificates should be amended to insert room to notify (and warn) certificate holders of an SIR existence.
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3. Key differences between takaful and conventional insurance include that takaful participants are both the insurer and insured through risk-sharing, and investments must be Sharia-compliant rather than allowing interest.
Basics of Insurance by RapidValue SolutionsRapidValue
This presentation explains the process of Insurance in a very Simplistic and schematic way. It starts with the definition of Insurance and moves onto the types of insurance like life insurance, general insurance, P&C insurance, Auto insurance etc. It explains the insurance industry sales channels and the customer purchase process. The presentation also looks to explain the claims process. It suggests, citing statistics from various sources, that insurance industry will have to go thorough digital transformation as it will benefit both the insurers and the customers.
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This document provides definitions for over 50 insurance terms, beginning with terms related to reinsurance. It defines terms such as ab initio, accident, accident cover, act of God, actual total loss, adjuster, advice, agent, aggrieved party, agreed value, amount covered, arbitration, arson, Australian Financial Services Licensee, and binder. The document continues alphabetically defining additional insurance-related terms through to contribution.
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The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
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إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
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CHUYÊN ĐỀ ÔN TẬP VÀ PHÁT TRIỂN CÂU HỎI TRONG ĐỀ MINH HỌA THI TỐT NGHIỆP THPT ...
Reinsurance-FC01.pptx
1. Reinsurance
By.
Winston Kuti-George MBA, FCII, FABE, SIRM, CMgr MCMI
Chartered Insurance Practitioner, UK
9/13/2022
Reinsurance-Insurance Foundation Certificate-West African
Insurance Institute
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2. Learning Outcome
in this presentation, you will understand:
• Risk Transfer option: Individual & Company
• What is Reinsurance
• The Basic Principle and Purpose of Reinsurance
• Function of Reinsurance
• Sellers of Reinsurance
• Buyers of Reinsurance
• Types of Reinsurance:
• Facultative & Treaty
• Uses of Facultative Reinsurance
• Advantages of facultative reinsurance
• Treaty reinsurance
• Distinction between proportional & Bon-proportional
• Examples
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Risk
Avoid
Live in a
cave
Prevent
Sprinklers/ex
tinguisher
Limit
Solid
construction
Transfer
Insure
Accept
Put up with
a loss
Risk transfer options
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Risk
Avoid
Decline
Prevent
Add
warranties
Limit
Fix retention
and limit of
reinsurance
Transfer
Reinsure
Accept
Put up
with a loss
Insurers risk transfer options
5. What is Reinsurance?
Reinsurance is a transaction whereby one insurance company
(the “reinsurer”) agrees to indemnify another insurance company (the
“reinsured, “cedent” or “primary” company) all or part of the loss that
the latter sustains under a policy or policies that it has issued. For this
service, the ceding company pays the reinsurer a premium.
Source: Munich Re, Basic Guide
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6. Purpose of
Reinsurance
Provides protection against the consequences of unexpected material losses.
Spreads risk by permitting an insurer and reinsurers throughout a variety of
different geographical areas.
Increase capacity by permitting an insurer to accept more business that it is
comfortable with at a gross level.
Provides security by relieving the insurer of some of the uncertainty of loss.
Increase stability in result by smoothing the net loss experience of the
insurer and customers of the insurer
Allows the insurer to manage the performance of its portfolio of risks and
that of its asset base.
Provide tax advantages since premium ceded to the reinsurers are tax
deductible.
Provide cash flow advantages since the insurer can make a cash call upon the
reinsurer when losses occur.
Influence corporate strategy as assists the insurer in deciding what
proportion of its assets it is prepared to put at risk from one, or a series of
related losses.
7. Function of Reinsurance
Capacity Relief
This allows the cedant to write larger amount of insurance
Catastrophe Protection
Protects the insurer against a large single, catastrophe loss or multiple of large
losses
Stabilization
Help smooth the reinsured operating result form year to year.
Surplus Relief
Releases the strain on the reinsured’s surplus in terms of rapid premium growth
Market withdrawal
Provide a means of reinsured withdrawal from a line of business or geographical
zone or product line
Expertise
Provides the reinsured with a source of underwriting information when
developing new product and/or entering new product line of insurance or a
new line of business or new market
The reasons common to all
for buying Reinsurance are:
8. Buyers of
Reinsurance
Insurance Companies
Insurance companies are principal customers of reinsurers
Lloyd’s Syndicates
Lloyd’s syndicates are significant buyers who make demands of
reinsurance to deliver sophisticated solution to their requirements.
State-owned insurance corporations
state insurance companies may, along with regional reinsurance
corporations, received compulsory cession from within their
geographical or political community and require reinsurance to
achieve balance in their portfolios and an international spread of risk.
Regional Insurance corporations
Companies established in the same way as state-owned insurance
corporations that are prevailing where individual states are united by
close political and cultural bonds.
9. Buyers of
Reinsurance
Takaful companies
takaful companies accept insurances from Islamic communities
and buy reinsurance from retakaful companies or conventional
reinsurers if further capacity is needed.
Captive Insurance Companies
A risk bearing entity controlled or owned by an organization
whose primary business is not that of insurance. The captive is
then in need of reinsurance for all the reasons that a primary
insurer would have.
Mutual Insurance Companies
They are companies owned by policy holder, who share in the
profits of the company by means of lower premiums or
preferential cover.
Reinsurance companies
Reinsurance companies themselves, along with reinsurance
pools, buy reinsurance in order to dilute accumulations of risk.
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Reinsurance
Facultative
Proportional
Quota share
Non-
Proportional
Excess of
Loss
Treaty
Proportional
Quota Share Surplus
Non-
proportional
Excess of
Loss
Stop loss
Cat Excess of
Loss
Types of Reinsurance
12. Facultative reinsurance
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Facultative means optional, so both
parties to the reinsurance of an
individual risk have a choice as to
whether to enter into the contract or
not: the original insurer in determining
whether it wishes to buy cover and the
reinsurer in determining whether it
wants to accept the risk and at what
terms.
Each risk is a separate reinsurance
contract, and this is important to note
when considering treaty reinsurance
later.
13. Uses of
facultative
reinsurance
Facultative reinsurance could be used in the following
ways:
o Where the insurer requires capacity beyond its
treaties providing automatic underwriting capacity.
o Where the risk is excluded from the insurer’s treaty
reinsurance.
o Where the insurer does not want to cede the risk to
its reinsurance treaty or where a particular risk,
although covered under the treaty reinsurer does
not wish to cover.
o Where the original risk is hazardous
o Where there are unique commercial, financial or
strategic reasons.
14. Advantages of facultative
reinsurance
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Risk are considered individually.
Reinsurers can negotiate a
suitable premium for the actual
risk concerned rather than having
to consider it as part of an overall
portfolio of risk.
There is a freedom for the insurer
to offer any risk which may the be
accepted or declined by the
reinsurer.
The exposure of an insurer’s
treaty could be protected by
facultative reinsurance of
particular risks to ensure better
overall result and lower
reinsurance cost in the long term.
An insurer might benefit from the
specific knowledge of the
facultative reinsurer with regard
to the nature and potential of risk.
The opportunity for both parties
to develop a successful and
professional relationship.
A successful facultative
relationship with a reinsurer
might be a precursor to the
insurer offering it a place on its
schedule of treaty reinsurers.
15. Disadvantages
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Delay in acceptance as risk are considered individually, the insurer cannot be certain of the placement of
the facultative reinsurance and this could affect its ability to underwrite the underlying risk.
The administration involved is labour intensive.
Delay in issuing a policy can cause problems with clients.
The insurer has to disclose full information regarding its underwriting of the risk. This could also lead to
problems if the insurer is also a competitor in that field.
The insurer may lose control over the handling of the risk.
There is the possibility of the reinsurer exercising a certain amount of influence over the insurer’s
underwriting by asking them to improve the risk offered or influence
16. Treaty reinsurance
• Obligations are imposed on the insurer to offer and the
reinsurer to accept business that falls within the treaty
agreement.
• It is used where blocks of businesses can be placed with a
reinsurer knowing that pre-agreed automatic cover is
available.
• Ceding and profit commission contribute to a lessening of
the cost of this type of reinsurance to the insurer.
• Treaties represent binding agreement that remove the
element of choice from both parties.
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17. Distinction between
proportional and non-
proportional method
• Facultative and treaty reinsurance can be arranged
on proportional and non-proportional bases.
• Proportional reinsurance implies that the insurer
cedes an agreed percentage, or proportion of the
risk and the reinsurer receives a corresponding
share of the premium(less commission) and pays
the same share of any loss.
• Non-proportional reinsurance only requires the
insurer to pay losses when they exceed a specified
monetary retention by the reinsured, and the
reinsurer’s premium is not proportional its potential
liability.
18. Examples
The ceding company has a 60% quota share treaty. Therefore,
40% of all premiums and losses will be retained by the
company and 60% of all premiums (less commission) and
losses will be ceded to the reinsurer subject to the limit of the
treaty. The commission to the ceding company is agreed upon
at 30%.
Premium
Assume a risk is written for a limit of $400,000 at a premium
of $2,000.
Premium retained by ceding company: 40% of $2,000 = $ 800
• Premium paid to reinsurer: 60% of $2,000 = $ 1,200
• Commission to ceding company: 30% of $1,200 = $ 360
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Insurance Institute
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19. Losses
• Losses
Assume a total loss of $400,000 occurs. For this loss, the
ceding company would pay $160,000 (40% of $400,000)
and the reinsurer would pay $240,000 (60% of $400,000).
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Insurance Institute
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20. Proportional & Non-Proportional
Reinsurance example
• Original risk: £60 Million which is shared equally between insurer A
and B with £30 million each. Insurer A has a surplus reinsurance treaty
of nine lines with a retention of £3 million, so its gross automatic
capacity is its retention of £3 million plus 9 lines of £3 million, in other
words (£3 million plus £27 million) £30 million.
• Insurer B has a facultative excess of loss reinsurance of £27 million
excess of £3 million. This means that the facultative reinsurance would
pay any loss incurred by insurer B that exceeds £3 million up to a total
of £27 million (i.e. giving B cover for any original loss it sustains up to
£30 million).
• When any loss to this original risk occurs, whether partial or total,
insurer A can expect to recover 90%, or 27/30 from its surplus
reinsurer. Conversely, insurer B’s facultative excess of loss reinsurance
will only allow a recovery of any claim where B’s share exceeds £3
million.
9/13/2022
Reinsurance-Insurance Foundation Certificate-West African
Insurance Institute
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22. Proportional & Non-Proportional
Reinsurance example
Consider the following losses:
• Loss 1: £2 million
Insurer A can recover 90% of its £2 million share, so £1,800,000
• Insurer B recovers nothing because its 3 million retention (or
deductible) is not exceeded.
• Loss 2: £5,500,000
• Insurer A can recover 90% of its £5,500,000 million share, so
£4,950,000
• Insurer B again recovers £2,500,000
• Loss 3: £8 million
• Insurer A can recover 90% of its £8 million share, so £7,200,000
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23. Surplus Treaty example
• Assume a 4 lines surplus treaty giving the insurer an
automatic underwriting capacity of £5 million (£1 million
own gross retention plus £4 million, comprising four surplus
lines each of £1 million).
• The insurer has accepted five risks, all of first-class
construction. If the insurer decided to retain its maximum
gross retention, then the risks would be apportioned to the
surplus treaty as follows:
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24. Surplus
Treaty
example
Reinsurance-Insurance Foundation Certificate-West African Insurance Institute
Risk Original sum
Insured
Company
retains
Cedes to
surplus
1 1,000,000 1,000,000 Nil
2 2,500,000 1,000,000 1,500,000
3 3,200,000 1,000,000 2,200,000
4 4,000,000 1,000,000 3,000,000
5 5,000,000 1,000,000 4,000,000
25. 1st and 2nd Surplus Treaty example
• Assume a 4 lines surplus treaty giving the insurer an
automatic underwriting capacity of £5 million (£1 million
own gross retention plus £4 million, comprising four
surplus lines each of £1 million) plus a five-line second
surplus treaty, increasing the overall automatic
underwriting capacity to £10 million
• The insurer has accepted five risks, all of first-class
construction. If the insurer decided to retain its maximum
gross retention, and cede its maximum capacity to the first
surplus and any balance to the second surplus, the risk
would be apportioned as shown
9/13/2022
Reinsurance-Insurance Foundation Certificate-West African
Insurance Institute
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26. 1st and 2nd
Surplus
Treaty
example
Reinsurance-Insurance Foundation Certificate-West African Insurance Institute 9/13/2022 26
Risk Original sum
insured
Company
retains
Cedes to
surplus
Cedes to
second
surplus
1 5,000,000 1,000,000 4,000,000 Nil
2 5,500,000 1,000,000 4,000,000 500,000
3 7,500,000 1,000,000 4,000,000 2,500,000
4 9,600,000 1,000,000 4,000,000 4,600,000
5 10,000,000 1,000,000 4,000,000 5,000,000