Brokerage revenue billions country marsh 140 us aon

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Brokerage Revenue (Billions) Country Marsh $14.0 U.S. Aon $10.0 U.K. Willis $8.1 U.K. Arthur J. Gallagher $4.5 U.S. BB&T Insurance $1.9 U.S. Hub International $1.9 U.S. Jardine Lloyd Thompson $1.9 U.K. Brown and Brown $1.9 U.S. USI Insurance Services $1.6 U.S. Lockton $1.6 U.S. Top Global Insurance Brokers
A direct response insurer sells directly to the consumer by television or some other media Marketing Systems in P&C Insurance: Direct Response
Functions and Organization of Insurers Chapter 8
Rate making Underwriting Production Claim settlement Reinsurance Investments Other functions Financial analysis of P&C insurers 57 Outline
Rate making : pricing of insurance Goal: Total premiums charged will be adequate to pay all claims and expenses, plus a profit Key people: Actuaries 58 Rate making Want to learn more about this career? Go to BeAnActuary.com
A rate is the price per unit of insurance An exposure unit is the pricing unit of a type of insurance, e.g., $100 of property value The pure premium is the portion of the rate expected to be needed to pay losses and loss adjustment expenses Loading is the amount that must be added to the pure premium for other expenses, profit, and a margin for contingencies The gross premium = (pure premium + loading) Where GP = Gross Premium PP = Pure Premium LP = Loading Percentage 59 Ratemaking in P&C Insurance
Underwriting The process of selecting, classifying, and pricing applicants for insurance Goal: to produce a profitable book of business Different insurers have different underwriting policies Acceptable classes of business Amounts of insurance that can be written Line underwriters make daily decisions based on the company’s underwriting policies 60 Underwriting
Basic underwriting principles (3): Attain an underwriting profit Select prospective insureds according to the company’s underwriting standards Maintain equity among the policyholders 61 Underwriting
Field underwriting (done by the agent) Company underwriting The application The agent’s report Physical inspection (P&C) A physical examination and attending physician’s report (L&H) The underwriting decision Accept the application (at appropriate rate) Accept the application subject to restrictions or modifications Reject the application 62 The Underwriting Process
Production: sales and marketing Agents and brokers are called producers An agent should be competent and ethical, placing the needs of his or her clients first Role of designations (CLU, ChFC, CPCU, CIC, CFP) Exams Codes of ethics 63 Production
Key people: Loss adjustors Role: To determine whether a claim is covered and, if so, how much should be paid Objectives of claims settlement Proper determination of coverage Fair and prompt payment of claims (no under- or overpaying) Personal assistance to the insured Illegal unfair claims practices (i.e., “ bad faith ”) Refusing to pay claims without conducting a reasonable investigation Not attempting to provide prompt, fair, and equitable settlements for clearly covered claims Offering unfair settlements, forcing insureds to sue for fair recovery 64 Claim Settlement
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