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Intro to P&C
Introduction to Property-Casualty Insurance
| Question | Answer |
|---|---|
| What is a Book of Business? | A group of Policies with a common characteristic, such as territory or type of coverage, or all policies written by a particular insurer or agency |
| What is Adverse Selection? | In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance. |
| What is Capacity? | The amount of business an insurer is able to write, usually based on a comparison of the Insurer's written premiums to its policyholder's surplus |
| What is Policyholder's Surplus | Under statutory accounting principles (SAP), an insurer's total admitted assets minus total liabilities |
| What is an Expert System? | Computer Software programs that supplement the underwriting decision-making process. These systems ask for the information necessary to make an underwriting decision, ensuring that no information is overlooked. |
| What is predictive modeling? | A process in which historical data based on behaviors and events are blended with multiple variables and used to construct models of anticipated future outcomes. |
| What is a Hazard? | A condition that increases the frequency or severity of a loss |
| What is a Deductible? | A portion of a covered loss that is not paid by the insurer. |
| What is the Underwriting Process? | Gathering the necessary information. Making the underwriting decision. Implementing the underwriting decision Monitoring the underwriting decision |
| What is a Rate? | the price per exposure unit for insurance coverage |
| What is a Rate Manual? | A resource for classifying accounts and developing premiums for given types of insurance. |
| What is an Exposure Unit? | The unit of measure used to determine an insurance policy premium. For Example: area, gross receipts, and Payroll |
| What is Ratemaking? | The process insurers use to calculate insurance rates, which are a premium component. |
| What is an Actuary? | A person who uses mathematical methods to analyze loss data and develop insurance rates. |
| What is an Insurance rating system? | The price per exposure unit determined by adjusting the prospective loss costs for expenses, profits, and contingencies. |
| What are Loss Costs | The portion of the Rate that covers projected claim payments and loss adjusting expenses. |
| What is the Insurance Advisory Organization? | An independent corporation that works with and on behalf of insurers that purchase or subscribe to their services, which include developing prospective loss costs and standard policy forms |
| What is the Law of large numbers? | A mathematical principle stating that as the number of similar but independent exposure units increases, the relative accuracy of predictions about future outcomes(losses) also increases. |
Created by:
himinameisgeorge
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