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31 Cards in this Set
- Front
- Back
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Insurance |
is the pooling of fortuitous losses by transfer of such risks to insurers, who agree to indemnify insureds for such losses
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Risk Control |
refers to techniques that reduce the frequency or severity of losses
Avoidance Loss Prevention Loss Reduction |
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Enterprise Risk |
combines all major risks face by the firm into a single unified treatment program. Speculative Risk Strategic Risk Operational Risk Financial Risk |
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Burden of Risk on Society |
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Basic Characteristics of Insurable Risk |
Large number of exposure untis Accidental and unintentional loss Determinable and measurable loss No catastrophic loss Calculable chance of loss Economically feasible |
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Law of Large Numbers |
the greater the number of exposures, the more closely the actual results will approach the probable results. |
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Adverse Selection |
is the tendency of persons with a higher-than-average chance of loss to seek insurance at standard rates
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Social Benefits of Insurance on Society |
Reducing Worry and Risk |
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Risk Management Process |
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Underwariting Cycle |
Hard Market- Soft Market- |
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Types of Insurance Company |
Stock Mutual Captives Lloyd's of London |
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Insurance agent |
Agent of the insurance company; not the policyholder |
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Broker |
represents the policy holder |
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Ratemaking |
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Claims settlement |
The amount that will be given after you get your file has been reviewed after a certain time period |
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Reinsurance |
Insurance for the insurance companies |
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Difference of investments of a life insurance company vs. property casualty? |
Look it up lol |
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What is the basis of rate making in Life Insurance? |
Mortality Tables |
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Insurance Regulations |
State vs. Federal Most people like the state method |
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Credit based insurance scores |
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Chance of Loss |
the probability that a loss will occur |
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Speculative Risk |
is a situation in which either profit or loss is possible |
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Pure Risk |
is a situation in which there are ONLY the possibilities of loss or no loss |
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Perils |
Cause of the loss Ex: Wind, (in auto accident collision is the peril) |
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Loss Exposure |
any situation or circumstance in which a loss is possible, regardless of whether a loss occurs |
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Risk |
Uncertainty concerning the occurrence of a loss |
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Objective Risk |
Relative variation of actual loss from expected loss |
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Subjective Risk |
Uncertainty based on a person's mental condition or state of mind |
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Objective Probability |
the long-run relative frequency of an event based on the assumptions of an infinite number of observations and of no change in the underlying conditions. |
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Subjective Probability |
Individuals personal estimate of the chance of loss |
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Burden on Society |
Large Emergency Funds Discourages Innovation Causes worry and fear |
