Week 5 Flashcards
For a customer, what is insurance?
It is an intangible (not physical) promise finically
What are the three ratios?
Claims ratio, expenses ratio and combined ratio
What does >100% and <100% mean?
if there’s a >100% that means there has been a loss, more money paid out in claims than premiums
<100% this means there has been a profit on the underwriting
Whats a claims ratio, expense ratio and combined ratio?
A claims ratio is also known as a loss ratio, expense ratio is the premiums you spend as operating cost and combined ratio is your overall profitability.
What does indemnity mean in insurance?
In basic putting you back to your pre financial loss
What might conflict with insurers?
Satisfying policy holders, having indemnity at the lowest cost you can and avoiding fraud
What are the main steps to a claim?
Think NAMS
Notification (claims handling), acceptance, management and quantification, settlement and closure (claims reserving) .
In the claims process, claims handling is also known as?
Notification
In the claims process, claims reserving is also known as?
Settlement and closure
What is claims management?
The process in which companies assess and fulfil policy holders claims such as direct lines claims philosophy to focus on simple product that lead to simple claims. it is also the complete operational criteria of claims, how competent they are as well.
What might be a difficulty when considering claim size?
Typically the smaller the claim the more simple, the more expensive the claim the more amount of expert will have to be involved.
What is a claims reserve?
Money set aside by insurer to cover future expected losses
Why might some insurance costs be more expensive than other?
Due to frequency and severity
What are the two types of timing insurance?
Immediate (car crash) and deferred (medical)
What can claims management strongly influence?
Claims management influences performance.
