Chapter 2 Flashcards
What is the role of members’ agent at Lloyds?
Advising their client on the advantages and disadvantages of investing in Lloyds
IPT is 20% for which insurance?
Travel Insurance
What is the function of a managing general agent?
Providing their specialist expertise they have to offer in their niche area
A protective cell company is required to have an approved business plan for…
Each cell
Companies that manage one or more Lloyds syndicates on behalf of members are known as…
Managing agents
The Motor Insurers Bureau is financed by…
A levy on authorised UK motor insurers
Under contract certainty when must the signing down of lines be done?
Prior to inception
What insurance do Protection and Indemnity associations, associate with?
Marine liability
What is the main structure of the insurance market?
- Buyers
- Intermediaries
- Aggregators
- Insurers
- Reinsurers
Types of buyers
- Private Individuals
- Partnerships
- Companies
- Public bodies
- Associations/clubs
Private individuals
Typically buy insurance policies for things like cars, mobile and household.
Partnerships
Most commonly found in the medical and legal professions. Their insurance tends to be catered for by specialist schemes
Companies
Typically need insurance for staff and property and is bought to protect the business.
Public bodies
Major buyers of insurance and include local authorities and schools. Typically owned by the government.
For example: NHS, polices and schools
Associations/clubs
This could be a football club or stamp collectors club they need insurance. Typically property and liability
Types of insurers
- Propriety companies
- Mutual companies
- Captive insurers
- Societas Europeas
- Lloyds
- Takaful insurers
- Mutual indemnity associations
Propriety companies
Owned by their shareholder and registered under The Companies Act 1985. All of their profits are kept.
Mutual companies
Owned by their policyholders and their profits are shared between the policy holders by way of lower premiums.
Captive insurers
Not open to everyone, their insurance is established by their parent companies/groups. Captive insurance is a tax efficient way of risk transfer
Societas Europeas
Owned by its parent company. A cost efficient way to merge companies across the EU.
Lloyds
Where sizeable/complex industrial risks all over the world are placed.
Takaful insurers
Type of insurance that has its roots in the Islamic financial services industry and bases the ruling of Sharia Law on financial transactions.
Mutual indemnity associations
Owned by their policyholders. Mainly operate in marine insurance
Lloyds syndicate
Made up of one or more members that join together to accept insurance risks, which they will either cover all or a portion of
What do syndicates do?
They write a range of polices, direct insurance and reinsurance.
Covering: casualties, property, marine, energy, motor and other risks
Who do syndicates employ?
Syndicates employ a managing agent who then appoint an underwriter to accept risks
Managing agent
A managing agent is a company set up to manage one or more syndicates, on behalf of members who provide the capital.
Who do managing agents employ?
They employ underwriters.
Who can be an underwriter?
- Person employed by an insurance company to make decisions
- Lloyds underwriters
- Insurance company itself
What is an underwriters main function?
- Assess the risks that people bring to the pool
- Decide whether or not to accept the risk
- Determine the terms/conditions
Claims personnel
- Deals with claims quickly and fairly
- Distinguish real and fraudulent claims
- Determine a realistic cost of a claim
- Settle claims with the minimum of wastage
Loss adjusters
An expert in claims processing, they act on the insurers behalf.
- Investigate circumstances of a claim
- Negotiate amounts claimed
- Determine whether the loss is covered
Loss assessors
An expert in dealing with claims and acts on behalf of the insured/policyholder
- Appointed by the policy holder to prepare and negotiate a claim on their behalf
Surveyors
Carry out a variety of functions on behalf of the insures
Actuaries
A professionally qualified person who applies probability and statistics theory to problems of insurance, investment, financial and risk management
Risk managers
Appointed by firms for taking control of and developing a formal strategy
- Provide guidance on best practice in these areas to management
- The transfer of appropriately identified risk by contract of insurance
