Introduction to General Insurance
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Introduction to General Insurance

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Introduction to General Insurance Introduction to General Insurance Presentation Transcript

  • Introduction to General Insurance
  • The concept of risk• Risk is the ‘effect of uncertainty on objectives’—the chance of something happening.• In the context of insurance it means the possibility of an adverse outcome from a particular event.• Insurance is only concerned with adverse outcomes that involve the risk of financial loss. 2
  • Strategies for handling risk• Risks can be: – accepted – avoided – reduced – transferred. 3
  • What are insurable risks?• For a risk to be insurable: – the loss must be fortuitous (accidental) – there must be an insurable interest at the time the loss occurs – the loss must not be excessive or catastrophic – it must not be against the public interest. 4
  • Reinsurance• Reinsurance allows insurers to reduce their exposure to particular risks by transferring part of the risk to a reinsurer, thereby increasing their capacity to accept additional risks;.• The types of reinsurance methods are: – treaty – facultative. 5
  • Insurance in society• The functions of insurance in society include: – bearing risk – stimulating business enterprise – freeing up capital – encouraging efficiency in commerce by providing peace of mind and security – promoting loss prevention – assisting business survival. 6
  • Session 2 – The regulatory framework• This session covers: – key insurance regulators and organisations – insurance laws and consumer protection legislation – other important Acts and Codes – complaints and dispute procedures. 7
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