The Insurance Business
Chance of loss from an event that can't be controlled.
What is a risk?
The dangers which are visible, tangible, measurable, and observable.
What is a PHYSICAL hazard?
(Physical hazards indicate those dangers of the subject-matter of insurance which can be ascertained or identified by mere inspection of the risk.)
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?
Those dangers which relate to character, integrity, and mental attitude of the insured.
What is a MORAL hazard?
(These are not visible and cannot be identified or ascertained by mere inspection of the risk or the subject-matter of 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?
Not wearing a seatbelt while driving.
What is a MORALE hazard?
Term referring to the maximum loss expected at a given location (Hint: Brad Herman's UAF Presentation).
What is PML (Probable Maximum Loss)?
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?
Dangers defined as the passive indifference on the part of those exposed (such as employees) as to the consequences as their actions, even if it means injury to themselves or others.
What is a MORALE hazard?
A non-profit organization that provides support and standardization for insurance regulation in the United States.
What is the National Association of Insurance Commissioners (NAIC)?
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?
Extension electrical wires cascading on the floor of a work space.
What is a PHYSICAL hazard?
When the company passes on ("cedes") some part of its own insurance liabilities to another insurance company.
What is Reinsurance?
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.