Chapter 1

Question 1

Rating

Answer 1

Process of setting a premium to a specific risk

Question 2

Class rating

Answer 2

Approach used when statistics can be gathered on a large number of risks that share common characteristics.

Question 3

Schedule rating

Answer 3

Used when available statistical data are too fragmented for class rating

Question 4

Data analytics

Answer 4

Gathering and using data from different sources, UW and actuaries can more accurately price risks

Question 5

Management by exception

Answer 5

Establish a set of acceptable boundaries for a risk then ask for reports only in risks that fall outside the boundaries

Question 6

Ways an UW can manage unfamiliar systems

Answer 6

1. Get acquainted with new insurance systems
2. Non insurance tools
3. Learning about insurers data base.
4. Become familiar with other database applications
5. Learning about available information online
6. Finding out where to get help

Question 7

Subscription policy

Answer 7

A single policy covering a risk that is divided among a number of insurers. Policy issued by lead company

Question 8

Manuscript wording

Answer 8

Policy wording that does not conform to the standard wording in general use within the insurance industry and is unique to the policy involved