Chapter 9

Question 1

What three kinds of information is needed by insurers?

Answer 1

• Board level reporting
• Reporting to underwriting managers
• Operational data

Question 2

What are directors concerned about at board level?

Answer 2

Group performance/profitability, the control of downside risk and broad strategy implementation

Question 3

What specific information is required at operational level?

Answer 3

Loss ratio claims stats, new business, retention, rate increases, credit control and compliance with contract certainty standards

Question 4

What is the personal injury discount rate?

Answer 4

Currently -0.25%
The lump-sum payments from insurers to claimants who are involved in life-changing injuries is based on the rate of return they can reasonably be expected to achieve by investing the lump sum

Question 5

What could give rise to an accumulation of risk for a property insurer?

Answer 5

Fire, insuring a number of insureds occupying the same premises, insuring both the landlord and the tenant of the same premises, storm and flood

Question 6

What two things are not taken into account when measuring ELR at policy level or broker level?

Answer 6

IBNR and reinsurance