The Insurance Business
Chance of loss from an event that can't be controlled.
What is a risk?
Protects individuals and families. against financial losses arising from unexpected events impacting their personal assets.
What are PERSONAL lines?
Covers things you own like your home or your car.
What is PROPERTY Insurance?
The method by which an insurance company reaches its insureds.
What is the Distribution System?
Evaluating the risk to determine if it is profitable for the insurance company to take the chance on providing insurance.
What is the Underwriting Process?
A financial product that is purchased to protect against the risk of large losses.
What is Insurance?
Provides financial security for your loved ones after your passing
What is LIFE insurance?
Insurance also known as Liability Insurance
What is CASUALTY Insurance?
An individual who acts as an intermediary between the people who want to buy insurance and the carriers that develop the policies.
What are Insurance Agents?
Note: an agent signs a contract to represent an insurance carrier. An insurance agent has the authority to sell its policies and bind coverage. The carrier gives the agent a sales quota and pays them a commission.
Risk type, size, location, proximity to natural catastrophes or other hazards, and financial resources.
What are factors that influence the Underwriting Appetite?
Insurance protects people financially: to transfer risk, protect property/family/businesses/health.
Why do people need insurance?
Safeguards businesses and their assets from risks associated with business operations.
What are COMMERCIAL lines?
A strategy employed by insurance companies to minimize their risks.
What is Spread of Risk?
Insurance salesperson who searches the marketplace in the interest of clients, not insurance companies.
What is a Broker?
The difference between what an insurer pays out in claims and expenses and the premiums collected.
What is Underwriting profit?
A contract between the insurance company and the insured that states exact terms of contract.
What is an Insurance Policy?
Ensures access to medical care and manages associated costs during your lifetime.
What is HEALTH insurance?
Insurance companies offer policies to many different policyholders across various geographic locations.
What is Geographic Diversification?
An association providing a physical facility and offers services to its members selling insurance.
What is Lloyds of London?
Licensed in a small number of jurisdictions in United States.
Price for risk, identify ways to limit exposures, restrict types of business, and use reinsurers when applicable.
What is Risk Management?
Risk management is the process of making and implementing decisions that will minimize the effects of losses.
The person who owns the insurance policy.
Who is a policyholder?
Protects tangible things and liabilities related to them (i.e. physical belongings and responsibility for harm to others).
What is Property & Casualty Insurance?
When a sufficient number of insureds pay in, the funds available to pay claims increases, and the changes of a single claim exhausting the available funds gets smaller.
What is Risk Pooling?
(Law of Large Numbers)
A group which writes commercial general liability and products liability insurance for entities who have difficulty obtaining insurance.
What is a Risk Retention Group?
The meaning of MGA.
What is Managing General Agent?
A specialized type of insurance agent or broker who has been granted underwriting authority by an insurer.