Chapter 5 - Common Functions Within Insurance Organisations Flashcards
Who does strategy team usually in head office report to?
Chief executive and finance director
Planning tool used by a strategy team will include a what
SWOT analysis
Why might also in regards to strategic focus, a company decide to do business in other countries?
Spread their risk, e.g if catastrophic losses all in once place then business totally gone, whereas if spread about then they have less exposure.
The essential role of the underwriting department is to what?
Calculate the premiums to be charged for the risks to be insured.
Explain the underwriting hierarchy
From top to bottom
- director of underwriting
- head of department (e.g marine)
- class underwriters
- section supervisors
- underwriters
- assistant and trainee underwriters
What is a pure risk premium?
The estimated amount of premium required to pay claims before expenses and profit and sometimes brokerage is added.
Why to insurers delegate underwriting authority to other organisations?
Acquire business and reduce mangement expenses
The party to whom authority has been delegated is known as the …
Coverholder
An agreement called a ??????? ???????? Is set up between the parties, which sets out the scope and extent of the authority delegated to the cover holder.
Binding authority
An agreement between an individual broker and a group of two or more insurers whereby each insurer or underwriter agrees to accept a pre agreed proportion of a specified type of insurance is known as a what?
Line slip
The role of the claims department is to ensure what?
When claims are made, the policyholder receives a fair and equitable settlement for their loss, in accordance with the contractual obligations of the insurance policy.
The job of the claims department is often one of managing expectations and protecting what?
The good reputation of the company for fair dealing.
Identify seven roles of the marketing team in an insurance company
Seven from:
- market research
- competitior research
- customer profiling, target markets or segmentation
- development of strategic marketting plans
- development of operational marketing plans
- advertising
- media relations
- public relations and sponsership
- product development
- relationship management including sales management and customer service
What is the purpose of marketing plan?
-
- Identify target markets
- Formulate marketing strategy
- Control marketing operations
- Monitor the successes of products of services
The 4 types of actuaries are…?
- Pricing actuaries
- Reserving actuaries
- Modelling specialists
- Those who focus on solvency capital
General pricing actuaries provide support to the underwriting team by doing what?
Predicting loss ratios within a stated range for a particular book of business,
Reserving actuaries…
Undertake extensive reviews of the initial reserve set against a claim compared to the final costs in order to assess the trends in reserving movements.
Under Solvency II internal model capital assessment, the programme that provides the capital estimate is known as what?
Calculation kernel
Many organisations have created what role of take the lead of risk management activities?
Chief risk officer or head of risk mangement
In regards to risk identification, what are some of the methods used?
- brainstorming and risk workshops
- site visits
- scenario analysis
- flow process analysis
Risks that have been identified and analysed are then recorded in a…
Risk register.
All insurance companies hold some form of asset in order to fund the business. What are three main types of asset….
- Premiums
- Claims reserves
- Shareholders funs, retained profits and loans
What is the responsibility of the investment department?
Best return possible, while at the same time keeping the assets readily available to meet the expenses of running the business and to pay claims.
What isa an example of a short term investment available to pay short tail claims
Cash at the bank
Where equities are held, this is usually regarded as a what type of investment
Medium to long term
Many life and pension firms hold part of their investments in commercial property - this is what type of investment?
Long term
Descions regarding the insurances to be transacted, management of costs and expenses, investment strategy and capital raising and solvency ratios are all under the direct influence what function
Finance
The legal and company secretary function of a company looks after all documentation, filings and registrations required by whom?
Companies house
A key feature of the company secretary role is the organisation and operation of…
Board meetings and the meetings of board committees.
The solicitor heading the in house legal department is sometimes known as …
General counsel
When the company is entering a contract with for example an outsourcing supplier, exceeding a stated amount, e,g £25,000 who will it be referred to…
Legal team
What is the key role of the compliance department ?
Ensure as far as possible, that the operations of the firm are compliant with regulatory requirements.
Compliance will audit current processes and practices to make sure they do what
Conform to regulations.
While the internal audit department covers all areas of the business, the key focus is on what?
The financial statements in the firms annual reports and accounts.
A core role of the internal audit is to ensure the financial resources of the firm are protected against what?
Fraud and errors.
Why does head of internal audit report to chairman of audit committee?
Maintain independence from the operating divisions, also allows open discussions of any problems found in the auditing work.
The central function of IT is to what?
Establish the hardware requirements, including servers, desktop PCs and printers and the whole of the system of connections.
What must be stablished so that people’s personal data is not accessed?
Security framework
What does the HR function do?
Resourcing of staff and ensures the best practice recruitment, employment and staff development techniques are used.
What are insurers second biggest costs after claims
Staff costs
Why would Human Resources carry out external research?
Gain a picture of salaries and benefits being offered to people employed in similar roles in order to set a competitive package and attract candidates.
The role of facilities management includes what?
Procurement of an office of other property to meet the accommodation needs to the company. T
What is a hot site location?
Where the IT runs parallel in real time and the building can be occupied at short notice.
