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8.risk Management and Insurance UNIT 8

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0% found this document useful (0 votes)
20 views14 pages

8.risk Management and Insurance UNIT 8

abc

Uploaded by

SaritaBhusal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 14

RISK MANAGEMENT AND

INSURANCE

PREETI DEO
UNIT VIII
UNIT 8 : LIFE AND HEALTH INSURANCE

Functions of Insurers

Insurance Company Operation: Rate Making,


Production, Underwriting, Claims Settlement

Investment Functions

Miscellaneous Functions
FUNCTIONS OF INSURERS
■ Provides certainty.
■ Provides certainty of payment at the uncertainty of loss.
■ Provides protection.
■ Risk-Sharing.
■ Prevention of loss.
■ It Provides Capital.
■ It Improves Efficiency.
■ It helps Economic Progress.
ON AGGREGATE
■ 1. Ratemaking
■ 2. Production
■ 3. Underwriting
■ 4. Loss Settlement
■ 5. Investment
INSURANCE COMPANY OPERATION:
RATE MAKING, PRODUCTION,
UNDERWRITING, CLAIMS SETTLEMENT
RATE MAKING
■ Rate Price charged per unit of protection Premium Determined by
multiplying rate by units of protection purchased Gross Rate
Composed of two parts, designed to pay losses and expenses Pure
Premium Portion of the Gross Rate designed to pay losses Loading
Portion of Gross Rate designed to cover expenses of operation
PRODUCTION
■ Formulation of Policies (With approval)
■ Using Standard Policies
UNDERWRITING
Basic purpose:
■ avoid adverse selection
■ Relationship of underwriting with adequacy of rates
■ Exposure that is unacceptable at one rate may be acceptable at
another
LOSS SETTLEMENT

 Its the core responsibility of Insurers to settle any loss which has been
provided coverage through insurance.

 Shall follow claims guidelines


INVESTMENT
■ To invest the premium collection /earnings as per
investment directives.
SOURCES OF UNDERWRITING
INFORMATION
1. The application/ proposal form
2. Information from the agent or broker
3. Investigations
4. Information bureaus
5. Physical examinations or inspections
POST SELECTION UNDERWRITING
1.Post selection underwriting (or renewal underwriting) occurs when the insurer
decides whether to continue insurance.
2.Insurer may decline to renew insurance or may offer narrower
coverage.
3. Because cancellation or nonrenewal can impose hardship on insured,
4.When the option of post selection underwriting is limited, insurers may be more
selective in initial underwriting.
MISCELLANEOUS FUNCTIONS
■ Awareness programs
■ Corporate Social Responsibility (CSR)
■ Conduct Trainings, etc
END OF UNIT 8
Thank you !!

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