Chapter 1 Flashcards
What is a proprietary company
Company owned by shareholders- most insurers
What is a mutual company
A policyholder owned and any surplus is reinvested in a company to reduce the premiums. Think NFUM
In Lloyds what does a franchisor do
Approved business plans and make sure members are compliant
What is captive insurance
One policyholder only. This is self insurance/ the policy holder is the company owner
What is takaful insurance companies
Based on the rulings of sharia law. Muslim insurance. Main market place in some part of the world
What does takaful mean in Arabic
Guaranteeing each other
What do reinsurers do
Extend the risk transfer mechanism
What is the difference between facultative and treaty
Treaty can be divided into proportional and non proportional
What are the two main types of treaty
Proportional and non proportional
What is a proportional treaty
Where the insurer and reinsurance take a state proportion of each risk and share the premium/ claims on the same basis
What is non proportional treaty
Allows an insurer to retain the first part of cover and transfer the balance to the reinsurers
Is the government a policyholder when taking risk
Both policyholder and owner. Do you get an inputs but not that much
Where does the pool re sit
Acts as a reinsurers and insurers add 100% reinsured back to the pool re
Can everyone access reinsurance for flood re
Everyone in the applicable post code. Houses built after 2010 can’t as deemed as a known issue
What is self insurance
A business has taken the decision to create a budget line tor a risk instead of using a captive or an insurer
What is the difference between a captive insurer and non insurer when self insuring
With captive it costs money to set up
A captive sets aside money for long time reserves and must be run like an insurer
Non insures have no provision of the risk and no budget set for it
What does the London market comprise off
Insurance and reinsurance
Lloyds of London syndicates
Marine protection
Indemnity club
Brokers
What are the seven participants in the London market
1 . Insurance companies that are member of the IUA including branches or subsidiaries of foreign companies
2. Insurance complained within London underwriting offices
3. P & I clubs
4. Pools - international oil insurers and the British insurance committee
5. Lloyds of London
6. Contact offices of foreign companies not allowed to transact business in the U.K.
7. Insurance brokers
What are the different distribution channels used by insurers
Direct insurance
Independent intermediaries
Banks and building societies
Retailers and affinity groups
Travel agents and tour operators
Aggregators
What is an example of a direct insurer
Aggregators are not direct. Churchill would be an example or Hiscox
What is an example of independent intermediaries
Hettle andrews
What is an agent
Agent can only put forward their insurers terms not independent. Tied to one insurer
Can banks become intermediaries
Yes. They can set up partnerships with selected insurance or Lloyds syndicates of the provision of household, motor and travel insurance
What is white labelling
Where an organisation offers insurance products branded with their own name but under written by insurance company with a Lloyds syndicate