Week 1 Essay question Flashcards
Essay one is memorised where and is what?
Elements and principles of insurance and is based on your house.
What does essay one talk about?
Intro
Key elements in insurance
(Risk transfer, pooling of risks and indemnity)
Principles of insurance
(good faith, insurable interest, indemnity, contribution, subrogation and proximate cause)
Challenges in insurance
(moral hazard, adverse selection and correlated losses)
Conclusion
What might you talk about in proximate cause? (7)
Proximate cause is looking at the primary reason for the incident which caused the claim to be made
There is:
a named, insured peril
a named, excluded peril
unnamed peril
These influence when a claim may or may not be accepted
Also these impact the claims processes
Efficient proximate cause have simple primary causes. Concurrent causation usually have multiple possible primary causes which increases difficulty for insurers finding the proximate cause.
Explain what adverse selection is?
In basic, this is when a person from a certain situation is more or less likely to pick insurance due to something that they know. For example someone whom is fat is more likely to buy health insurance than someone whom is not.
What might you say for indemnity the first time and second time?
Idemnity aims to restore policy holders back to there pre financial loss and give them to the value of there loss, not to be profitted upon.
second time you will talk about how subrogation and contribution support indemnity.
What might you talk about in up most good faith?
Both insurer and the insured must disclose any material fact, a material fact is information which can change the outcome of a possible claim or pricing of insurance premiums as material facts greatly influence insurance decisions about policyholders.
What might you talk about in correlated losses?
Multiple events which can arise that cost insurance to payout in claims such as disaster like earthquakes or pandemics.
