Chapter 6 - Insurance Company Operations

Chapter 6 - Insurance Company Operations - Insurance...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Insurance Company Operations Chapter 6 Agenda Rate making Underwriting Production Claim settlement Reinsurance Investments Rate making Rate making refers to the pricing of insurance Total premiums charged must be adequate for paying all claims and expenses during the policy period Rates and premiums are determined by an actuary , using the companys past loss experience and industry statistics Underwriting Underwriting refers to the process of selecting, classifying, and pricing applicants for insurance The objective is to produce a profitable book of business A statement of underwriting policy establishes policies that are consistent with the companys objectives, such as Acceptable classes of business Amounts of insurance that can be written A line underwriter makes daily decisions concerning the acceptance or rejection of business Underwriting There are three important principles of underwriting: The underwriter must select prospective insureds according to the companys underwriting standards Underwriting should achieve a proper balance within each rate classification In class underwriting , exposure units with similar loss-producing characteristics are grouped together and charged the same rate Underwriting should maintain equity among the policyholders Underwriting Underwriting starts with the agent in the field Information for underwriting comes from: The application The agents report An inspection report Physical inspection A physical examination and attending physicians report...
View Full Document

This note was uploaded on 03/27/2012 for the course ACC 101 taught by Professor Smith during the Spring '12 term at Missouri State University-Springfield.

Page1 / 19

Chapter 6 - Insurance Company Operations - Insurance...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online