Chapter31-Other risk controls

Question 1

Framework

Answer 1

1 Risk management controls besides reinsurance and ART
2 Diversification of reinsurance business
3 Reciprocal quota share reinsurance over a wider range of contracts
4 Underwriting
5 Reasons for underwriting (SAFARI)
6 Types of underwriting
7 Assessing evidence of medical underwriting
8 Investigated factors in lifestyle underwriting
9 Financial underwriting and info used
10 Six possible actions from underwriting
11 Claims control systems
12 Examples of claims control systems
13 Balancing cost and benefits of claims control in general insurance
14 Income protector insurance rehabilitation
15 Management control systems used to reduce risk
16 Managing investment risk associated with options and guarantees
17 Dealing with low probability, high impact risk events
18 Assessing capital to retain for risk
19 Total cost of risk

Question 2

Reasons for underwriting

Answer 2

Suitable special terms – identification of the most suitable approach and level for special terms to be offered to substandard risks

Avoid anti-selection

Financial underwriting to reduce the risk of over-insurance on large policies

Actual claims experience being in line with that expected in the pricing basis

Risk classification to ensure that all risks are rated fairly (premium commensurate with the risk)

Identify substandard risks, for which special terms need to be quoted – while aiming to accept as many risks as possible on standard premium rates