The document discusses various operations of insurance companies, including ratemaking, underwriting, production, claims settlement, and reinsurance. It provides details on:
- How rates and premiums are determined by actuaries
- The underwriting process of selecting and classifying risks
- The sales and marketing activities of agents
- The objectives and process of claims adjustment
- The reasons reinsurance is used and the types of reinsurance treaties
The operations discussed are key functions of insurers that work together to issue policies, assess risks, pay claims, and transfer some risks to reinsurers.
1-INSURANCE COMPANY OPERATIONS
The most important insurance company operations consist of the following:
Ratemaking
Underwriting
Production
Claim settlement
Reinsurance
Insurers also engage in other operations, such as accounting, legal services, loss control, and information systems.
2-RATING AND RATEMAKING
Ratemaking refers to the pricing of insurance and the calculation of insurance premiums .
A rate is the price per unit of insurance.
An exposure unit is the unit of measurement used in insurance pricing, which varies by line of insurance.
The person who determines rates and premiums is known as an actuary . An actuary is a highly skilled mathematician who is involved in all phases of insurance company operations, including planning, pricing, and research.
3-UNDERWRITING
Underwriting refers to the process of selecting, classifying, and pricing applicants for insurance . The underwriter is the person who decides to accept or reject an application.
Statement of Underwriting Policy:Underwriting starts with a clear statement of underwriting policy.
An insurer must establish an underwriting policy that is consistent with company objectives.
4-PRODUCTION
The term production refers to the sales and marketing activities of insurers. Agents who sell insurance are frequently referred to as producers .
Life insurers have an agency or sales department. This department is responsible for recruiting and training new agents and for the supervision of general agents, branch office managers, and local agents.
Property and casualty insurers have marketing departments. To assist agents in the field, special agents may also be appointed.
A special agent is a highly specialized technician who provides local agents in the field with technical help and assistance with their marketing problems.
5-CLAIMS SETTLEMENT
Every insurance company has a claims division or department for adjusting claims. This section of the chapter examines the basic objectives in adjusting claims, the different types of claim adjustors, and the various steps in the claim-settlement process.
Basic Objectives in Claims Settlement:
Verification of a covered loss
Fair and prompt payment of claims
Personal assistance to the insured
6-REINSURANCE
Reinsurance is an arrangement by which the primary insurer that initially writes the insurance transfers to another insurer (called the reinsurer) part or all of the potential losses associated with such insurance .
The primary insurer that initially writes the insurance is called the ceding company .
The insurer that acceptspart or all of the insurance from the ceding com pany is called the reinsurer .
The amount of insurance retained by the ceding company for its own account is called the retention limit or net retention .
The amount of insurance ceded to the reinsurer is known as the cession
1-Insurance Marketing
AGENTS AND BROKERS
A successful sales force is the key to success in the financial services industry. Most insurance policies sold today are sold by agents and brokers.
Agents:An agent is someonewho legally represents the principal and has the authority to act on the principal’s behalf.
Brokers:A broker is someone who legally represents the insured even though he or she receives a commission from the insurer.
2-TYPES OF MARKETING SYSTEMS
Life Insurance Marketing
Distribution systems for the sale of life insurance have changed dramatically over time.
Major life insurance distribution systems:
Personal selling systems
Financial institution distribution systems
Direct response system
Other distribution systems
1-Personal Selling Systems:
2-Financial Institution Distribution Systems
3-Direct Response System
3-Property and Casualty Insurance Marketing
Independent agency system
Exclusive agency system
Direct writer
Direct response system
Multiple distribution systems
1-INSURANCE COMPANY OPERATIONS
The most important insurance company operations consist of the following:
Ratemaking
Underwriting
Production
Claim settlement
Reinsurance
Insurers also engage in other operations, such as accounting, legal services, loss control, and information systems.
2-RATING AND RATEMAKING
Ratemaking refers to the pricing of insurance and the calculation of insurance premiums .
A rate is the price per unit of insurance.
An exposure unit is the unit of measurement used in insurance pricing, which varies by line of insurance.
The person who determines rates and premiums is known as an actuary . An actuary is a highly skilled mathematician who is involved in all phases of insurance company operations, including planning, pricing, and research.
3-UNDERWRITING
Underwriting refers to the process of selecting, classifying, and pricing applicants for insurance . The underwriter is the person who decides to accept or reject an application.
Statement of Underwriting Policy:Underwriting starts with a clear statement of underwriting policy.
An insurer must establish an underwriting policy that is consistent with company objectives.
4-PRODUCTION
The term production refers to the sales and marketing activities of insurers. Agents who sell insurance are frequently referred to as producers .
Life insurers have an agency or sales department. This department is responsible for recruiting and training new agents and for the supervision of general agents, branch office managers, and local agents.
Property and casualty insurers have marketing departments. To assist agents in the field, special agents may also be appointed.
A special agent is a highly specialized technician who provides local agents in the field with technical help and assistance with their marketing problems.
5-CLAIMS SETTLEMENT
Every insurance company has a claims division or department for adjusting claims. This section of the chapter examines the basic objectives in adjusting claims, the different types of claim adjustors, and the various steps in the claim-settlement process.
Basic Objectives in Claims Settlement:
Verification of a covered loss
Fair and prompt payment of claims
Personal assistance to the insured
6-REINSURANCE
Reinsurance is an arrangement by which the primary insurer that initially writes the insurance transfers to another insurer (called the reinsurer) part or all of the potential losses associated with such insurance .
The primary insurer that initially writes the insurance is called the ceding company .
The insurer that acceptspart or all of the insurance from the ceding com pany is called the reinsurer .
The amount of insurance retained by the ceding company for its own account is called the retention limit or net retention .
The amount of insurance ceded to the reinsurer is known as the cession
1-Insurance Marketing
AGENTS AND BROKERS
A successful sales force is the key to success in the financial services industry. Most insurance policies sold today are sold by agents and brokers.
Agents:An agent is someonewho legally represents the principal and has the authority to act on the principal’s behalf.
Brokers:A broker is someone who legally represents the insured even though he or she receives a commission from the insurer.
2-TYPES OF MARKETING SYSTEMS
Life Insurance Marketing
Distribution systems for the sale of life insurance have changed dramatically over time.
Major life insurance distribution systems:
Personal selling systems
Financial institution distribution systems
Direct response system
Other distribution systems
1-Personal Selling Systems:
2-Financial Institution Distribution Systems
3-Direct Response System
3-Property and Casualty Insurance Marketing
Independent agency system
Exclusive agency system
Direct writer
Direct response system
Multiple distribution systems
DID YOU KNOW??
Today, the insurance industry in Malaysia offers more than just financial protection; there’re also great job opportunities for you.
Whatever careers you choose in this industry; you’ll enter an industry that offers great career development and growth through training and education.This is great place to start!!
View what career opportunities offered to talented people in the Malaysian insurance industry today.
You can also explore various other careers in insurance, the next question is only – when? The future’s bright. The future starts today!
Chapter 6: FINANCIAL OPERATIONS OF I NSURERSMarya Sholevar
1-Liabilities: Loss Reserves
A loss reserve is the estimated cost of settling claims for losses that have already occurred but that have not been paid as of the valuation date . More specifically, the loss reserve is an estimated amount for (1) claims reported and adjusted but not yet paid, (2) claims reported and filed, but not yet adjusted, and (3) claims for losses incurred but not yet reported to the company .
Loss reserves in property and casualty insurance can be classified as case reserves, reserves based on the loss ratio method, and reserves for incurred but not reported claims.
2-Policyholders’ Surplus
Policyholders’ surplus is the difference between an insurance company’s assets and liabilities . It is not calculated directly—it is the “balancing” item on the balance sheet.
If the insurer were to pay all of its liabilities using its assets, the amount remaining would be policyholders’ surplus.
Surplus can be thought of as a cushion that can be drawn upon if liabilities are higher than expected.
Surplus represents the paid-in capital of investors plus retained income from insurance operations and investments over time.
The level of surplus is also an important determinant of the amount of new business that an insurance company can write.
3-Income and Expense Statement
The income and expense statement summarizes revenues received and expenses paid during a specified period of time .
Revenues are cash inflows that the company can claim as income. The two principal sources of revenues for an insurance company are premiums and investment income.
Earned premiums represent the portion of the premiums for which insurance protection has been provided .
Expenses Partially offsetting the company’s revenues were the company’s expenses, which are cash outflows from the business.
The major expenses for an Insurance Company:
Adjusting claims
Paying the insured losses
Underwriting
4-Measuring Profit or Loss
A simple measure that can be used is the insurance company’s loss ratio and expense ratio.
The loss ratio is the ratio of incurred losses and loss adjustment expenses to premiums earned .
Loss ratio= (Incurred losses+Loss adjustment expenses)/Premiums earned
The expense ratio is equal to the company’s underwriting expenses divided by written premiums .
Expense ratio=Underwriting expenses/Premiums written
5-Rate-Making Methods
(http://optimuminsurance.com.au/Blog/tabid/158/ArticleID/6/The-benefits-of-engaging-an-insurance-broker.aspx) - We ask you to consider the following which should help you make a better informed decision:
1. Based on the project timelines, how would you anticipate develo.docxmonicafrancis71118
1. Based on the project timelines, how would you anticipate developing and transacting SSH’s immediate and longer-term insurance requirements?
The long-term insurance requirements will be addressed through a strategy that is mutually agreed upon with Dar SSH. We have suggested several proposals and recommendations for your insurance program as more detailed in our answer to question 6 of the proposal questionnaire. Preliminary discussions including the RFI presentation on 25th November will align both of us (Gulf Insurance as insurance provider and Dar SSH as partner) on objectives, timeline and process. The discussions should include input from stakeholders within Dar SSH such as regional offices and projects teams as on what are their expectations from the insurance and how they can contribute to effective and efficient insurance solution.
The preliminary discussions will lead to the following:
A. Development of requirements
B. Development of KPIs
C. Internal Information gathering
D. Approaching the insurance market for offering
It is difficult to set a time frame of the above exercise because it will depend on how sophisticated the ultimate strategy and based on internal dynamics within Dar SSH.
While discussions take place internally on the long-term insurance requirements, we believe the immediate requirements can be met through the current procedure, ad-hoc renewal of existing policies. The objective in the immediate/short term will be to ensure coverage continues without interruption so that exposure has protection to a good degree. The requirements 3-8 in Appendix Two will be critical in this stage. Requirement 2 can be met partially through tendering process, which is discussed in more details in following sections.
We propose the following measures to improve the process of achieving the immediate insurance requirements:
· Tabulate all 79 policies within your Appendix 3 by expiry date.
· Start the renewal exercise two months prior to expiry.
· Obtain internal feedback about current policy on the following aspects:
· Claims experience
· What is outstanding, how long and why
· What was not covered and why
· How long the paid claims took time and what was the average time of resolution?
· Survey on insurer handling of the claims
· Financial reconciliations
· Any claims agreed but not paid
· Any outstanding premiums
· What is the aging analysis of outstanding premiums
· Assess the renewal offer of incumbent insurer based on claims experience
There are requirements that are associated with long-term strategy such as 1, 9, 10 and 12. These requirements will be implemented at that stage.
We are prepared and delighted to support you on requirements 11 and 15 with immediate effect as follows:
· Requirement 11:
By end of January, we shall provide you with market update following the results of treaty renewals on 1st January. This is a milestone that insurance markets follow closely since it represents the general momentum of the m.
In this presentation we will deal with Insurance organizations, their operational structure, insurer’s function and key business terms used in this sector.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
When should a retail business that sells products to consumers consider piAmanda Smith
A retail business is a business that sells products to consumers (excluding manufacturers, importers/exporters). In order to determine when a retail business needs to consider Professional Indemnity Insurance, it is important to firstly explain the coverage provided by other policies as these policies do not overlap or provide dual cover. We have summarized an overview of common policy feature - it is important to remember that each policy wording can vary depending on the insurer so remember to compare each policy or seek professional advice.
DID YOU KNOW??
Today, the insurance industry in Malaysia offers more than just financial protection; there’re also great job opportunities for you.
Whatever careers you choose in this industry; you’ll enter an industry that offers great career development and growth through training and education.This is great place to start!!
View what career opportunities offered to talented people in the Malaysian insurance industry today.
You can also explore various other careers in insurance, the next question is only – when? The future’s bright. The future starts today!
Chapter 6: FINANCIAL OPERATIONS OF I NSURERSMarya Sholevar
1-Liabilities: Loss Reserves
A loss reserve is the estimated cost of settling claims for losses that have already occurred but that have not been paid as of the valuation date . More specifically, the loss reserve is an estimated amount for (1) claims reported and adjusted but not yet paid, (2) claims reported and filed, but not yet adjusted, and (3) claims for losses incurred but not yet reported to the company .
Loss reserves in property and casualty insurance can be classified as case reserves, reserves based on the loss ratio method, and reserves for incurred but not reported claims.
2-Policyholders’ Surplus
Policyholders’ surplus is the difference between an insurance company’s assets and liabilities . It is not calculated directly—it is the “balancing” item on the balance sheet.
If the insurer were to pay all of its liabilities using its assets, the amount remaining would be policyholders’ surplus.
Surplus can be thought of as a cushion that can be drawn upon if liabilities are higher than expected.
Surplus represents the paid-in capital of investors plus retained income from insurance operations and investments over time.
The level of surplus is also an important determinant of the amount of new business that an insurance company can write.
3-Income and Expense Statement
The income and expense statement summarizes revenues received and expenses paid during a specified period of time .
Revenues are cash inflows that the company can claim as income. The two principal sources of revenues for an insurance company are premiums and investment income.
Earned premiums represent the portion of the premiums for which insurance protection has been provided .
Expenses Partially offsetting the company’s revenues were the company’s expenses, which are cash outflows from the business.
The major expenses for an Insurance Company:
Adjusting claims
Paying the insured losses
Underwriting
4-Measuring Profit or Loss
A simple measure that can be used is the insurance company’s loss ratio and expense ratio.
The loss ratio is the ratio of incurred losses and loss adjustment expenses to premiums earned .
Loss ratio= (Incurred losses+Loss adjustment expenses)/Premiums earned
The expense ratio is equal to the company’s underwriting expenses divided by written premiums .
Expense ratio=Underwriting expenses/Premiums written
5-Rate-Making Methods
(http://optimuminsurance.com.au/Blog/tabid/158/ArticleID/6/The-benefits-of-engaging-an-insurance-broker.aspx) - We ask you to consider the following which should help you make a better informed decision:
1. Based on the project timelines, how would you anticipate develo.docxmonicafrancis71118
1. Based on the project timelines, how would you anticipate developing and transacting SSH’s immediate and longer-term insurance requirements?
The long-term insurance requirements will be addressed through a strategy that is mutually agreed upon with Dar SSH. We have suggested several proposals and recommendations for your insurance program as more detailed in our answer to question 6 of the proposal questionnaire. Preliminary discussions including the RFI presentation on 25th November will align both of us (Gulf Insurance as insurance provider and Dar SSH as partner) on objectives, timeline and process. The discussions should include input from stakeholders within Dar SSH such as regional offices and projects teams as on what are their expectations from the insurance and how they can contribute to effective and efficient insurance solution.
The preliminary discussions will lead to the following:
A. Development of requirements
B. Development of KPIs
C. Internal Information gathering
D. Approaching the insurance market for offering
It is difficult to set a time frame of the above exercise because it will depend on how sophisticated the ultimate strategy and based on internal dynamics within Dar SSH.
While discussions take place internally on the long-term insurance requirements, we believe the immediate requirements can be met through the current procedure, ad-hoc renewal of existing policies. The objective in the immediate/short term will be to ensure coverage continues without interruption so that exposure has protection to a good degree. The requirements 3-8 in Appendix Two will be critical in this stage. Requirement 2 can be met partially through tendering process, which is discussed in more details in following sections.
We propose the following measures to improve the process of achieving the immediate insurance requirements:
· Tabulate all 79 policies within your Appendix 3 by expiry date.
· Start the renewal exercise two months prior to expiry.
· Obtain internal feedback about current policy on the following aspects:
· Claims experience
· What is outstanding, how long and why
· What was not covered and why
· How long the paid claims took time and what was the average time of resolution?
· Survey on insurer handling of the claims
· Financial reconciliations
· Any claims agreed but not paid
· Any outstanding premiums
· What is the aging analysis of outstanding premiums
· Assess the renewal offer of incumbent insurer based on claims experience
There are requirements that are associated with long-term strategy such as 1, 9, 10 and 12. These requirements will be implemented at that stage.
We are prepared and delighted to support you on requirements 11 and 15 with immediate effect as follows:
· Requirement 11:
By end of January, we shall provide you with market update following the results of treaty renewals on 1st January. This is a milestone that insurance markets follow closely since it represents the general momentum of the m.
In this presentation we will deal with Insurance organizations, their operational structure, insurer’s function and key business terms used in this sector.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
When should a retail business that sells products to consumers consider piAmanda Smith
A retail business is a business that sells products to consumers (excluding manufacturers, importers/exporters). In order to determine when a retail business needs to consider Professional Indemnity Insurance, it is important to firstly explain the coverage provided by other policies as these policies do not overlap or provide dual cover. We have summarized an overview of common policy feature - it is important to remember that each policy wording can vary depending on the insurer so remember to compare each policy or seek professional advice.
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Remote sensing and monitoring are changing the mining industry for the better. These are providing innovative solutions to long-standing challenges. Those related to exploration, extraction, and overall environmental management by mining technology companies Odisha. These technologies make use of satellite imaging, aerial photography and sensors to collect data that might be inaccessible or from hazardous locations. With the use of this technology, mining operations are becoming increasingly efficient. Let us gain more insight into the key aspects associated with remote sensing and monitoring when it comes to mining.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
𝐓𝐉 𝐂𝐨𝐦𝐬 provides unlimited package services including such as Event organizing, Event planning, Event production, Manpower, PR marketing, Design 2D/3D, VIP protocols, Interpreter agency, etc.
Sports events - Golf competitions/billiards competitions/company sports events: dynamic and challenging
⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
➢ 2024 BAEKHYUN [Lonsdaleite] IN HO CHI MINH
➢ SUPER JUNIOR-L.S.S. THE SHOW : Th3ee Guys in HO CHI MINH
➢FreenBecky 1st Fan Meeting in Vietnam
➢CHILDREN ART EXHIBITION 2024: BEYOND BARRIERS
➢ WOW K-Music Festival 2023
➢ Winner [CROSS] Tour in HCM
➢ Super Show 9 in HCM with Super Junior
➢ HCMC - Gyeongsangbuk-do Culture and Tourism Festival
➢ Korean Vietnam Partnership - Fair with LG
➢ Korean President visits Samsung Electronics R&D Center
➢ Vietnam Food Expo with Lotte Wellfood
"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
India Orthopedic Devices Market: Unlocking Growth Secrets, Trends and Develop...Kumar Satyam
According to TechSci Research report, “India Orthopedic Devices Market -Industry Size, Share, Trends, Competition Forecast & Opportunities, 2030”, the India Orthopedic Devices Market stood at USD 1,280.54 Million in 2024 and is anticipated to grow with a CAGR of 7.84% in the forecast period, 2026-2030F. The India Orthopedic Devices Market is being driven by several factors. The most prominent ones include an increase in the elderly population, who are more prone to orthopedic conditions such as osteoporosis and arthritis. Moreover, the rise in sports injuries and road accidents are also contributing to the demand for orthopedic devices. Advances in technology and the introduction of innovative implants and prosthetics have further propelled the market growth. Additionally, government initiatives aimed at improving healthcare infrastructure and the increasing prevalence of lifestyle diseases have led to an upward trend in orthopedic surgeries, thereby fueling the market demand for these devices.
2. INSURANCE COMPANY
OPERATIONS
The most important insurance company operations
consist of the following:
●
●
●
●
● Ratemaking
Underwriting
Production
Claim settlement
Reinsurance
Insurers also engage in other operations, such as
accounting, legal services, loss control, and
information systems.
3. RATING AND RATEMAKING
●
●
●
●
Ratemaking refers to the pricing of insurance and
the calculation of insurance premiums .
Arate is the price per unit of insurance.
An exposure unit is the unit of measurement used in
insurance pricing, which varies by line of insurance.
The person who determines rates and premiums is
known as an actuary . An actuary is a highly skilled
mathematician who is involved in all phases of
insurance company operations, including planning,
pricing, and research.
4. RATING AND RATEMAKING
●
Rating is a process of multiplying a rate determined
by actuaries by the number of exposure units, and
then adjusting by various rating plans.
●
In life insurance, the actuary determines the
premiums for life and health insurance policies and
annuities also determine the legal reserves a
company needs for future obligations.
●
In property and casualty insurance, actuaries also
determine the rates for different lines of insurance
and also determine the adequacy of loss
reserves,allocate expenses, and compile statistics for
5. RATING AND RATEMAKING
●
In life insurance, the actuary studies important
statistical data on births, deaths, marriages, disease,
employment, retirement, and accidents.Based on this
●
information, the actuary determines the premiums
for life and health insurance policies and annuities.
The objectives of calculate premiums are make the
business
●
profitable, enable the company to compete
effectively with other insurers, and allow the
company to pay claims and expenses as they occur.
6. UNDERWRITING
Underwriting refers to the process of selecting,
classifying, and pricing applicants for insurance .
The underwriter is the person who decides to accept
or reject an application.
Statement of Underwriting Policy:Underwriting
starts with a clear statement of underwriting policy.
●
An insurer must establish an underwriting policy
that is consistent with company objectives.
7. UNDERWRITING
●
●
The insurer’s underwriting policy is determined by
top-level management in charge of underwriting.
The underwriting policy is stated in detail in an
underwriting guide that specifies the lines of
insurance to be written; territories to be developed;
forms and rating plans to be used; acceptable,
borderline, and prohibited business; amounts of
insurance
approval
to be written; business that requires
by a senior underwriter; and other
underwriting details.
8. Basic Underwriting Principles
1.Attain
objective
an underwriting profit:The primary
of underwriting is to attain an
underwriting profit. The objective is to produce a
profitable book of business.
2.Select prospective insureds according to the
company’s underwriting standards:the
underwriters should select only those insureds
whose actual loss experience is not likely to exceed
the loss experience assumed in the rating structure
with purpose of reducing adverse selection against
the insurer.
3.Provide equity among the policyholders:Means
9. Steps in Underwriting
After the insurer’s underwriting policy is established,
it must be communicated to the sales force. Initial
underwriting starts with the agent in the field.
●
●
● Agent as First Underwriter
Collecting Informations
Making an Underwriting Decision
10. Agent as First Underwriter
●
Agent as First Underwriter:This step is often
called field underwriting. The agent is told what
types of applicants are acceptable, borderline, or
prohibited.
In property and casualty insurance, the agent often has
authority to bind the company immediately. Thus, it
is important that the agent follow company policy
when soliciting applicants for insurance.
In life insurance, the agent must also solicitapplicants
in accordance with the company’s underwriting
policy.
11. Collecting Informations
The underwriter requires certain information in
deciding whether to accept or reject an applicant for
insurance. Important sources of information:
● Application. The type
depends on the type
of information required
of insurance requested.In
property insurance, provides the physical features of
●
the building and in life insurance provides age;
gende...
Agent’s report. Many insurers require the agent or
broker to give an evaluation of the prospective
insured. In life agent may be asked how long he or
12. Collecting Informations
●
Inspection report. In property insurance, the
company may require an inspection report by some
outside agency, especially if the underwriter
suspects moral hazard.In life insurance, the report
may provide information on the applicant’s financial
condition, marital status,...
●
Physical inspection. In property insurance and
casualty insurance, the underwriter may require a
physical inspection before the application is
approved.
●
Physical examination. In life insurance, a physical
13. Making an Underwriting Decision
After the underwriter evaluates the information, an
underwriting decision must be made. There are three
basic underwriting decisions with respect to an
initial application for insurance:
● Accept the application:
● Accept the application subject to certain
restrictions or modifications
● Reject the application
Many insurers now use computerized underwrit ing
for certain personal lines of insurance that can be
standardized, such as auto and homeowners
14. Other Underwriting Considerations
●
●
Rate adequacy and underwriting . Property and
casualty insurers are more willing to underwrite new
business for a specific line if rates are considered
adequate.
Reinsurance and underwriting . Availability of
reinsurance may result in more liberal underwriting.
However, if reinsurance cannot be obtained on
favorable terms, underwriting may be more
restrictive.
●
Renewal underwriting. In life insurance, policies
are not cancellable. In property and casualty
15. PRODUCTION
●
The term production refers to the sales and
marketing activities of insurers. Agents who sell
insurance are frequently referred to as producers .
●
Life insurers have an agency or sales department.
This department is responsible for recruiting and
training new agents and for the supervision of
general agents, branch office managers, and local
agents.
●
Property and casualty insurers have marketing
departments. To assist agents in the field, special
agents may also be appointed.
16. PRODUCTION
●
●
Professionalism in Selling means that the modern
agent should be a competent professional who has a
high degree of technical knowledge in a particular
area of insurance and who also places the needs of
his or her clients first.
The professional agent identifies potential insureds,
analyzes their insurance needs, and recommends a
product to meet their needs. After the sale, the agent
has the responsibility of providing follow-up service
to clients to keep their insurance programs up to
date. Finally, a professional agent abides by a code
of ethics.
17. PRODUCTION
●
Chartered Financial Consultant (ChFC) desig-
nation for professionals who are working in the
financial services industry.
●
Chartered Property Casualty Underwriter
(CPCU) is professional designation programs for
agents and other personnel in property and casualty
insurance.
●
●
The Certified Financial Planner (CFP)
designation is granted by the Certified Financial
Planner Board of Standards, Inc.
Many agents in property and liability insurance have
18. CLAIMS SETTLEMENT
●
●
Every insurance company has a claims division or
department for adjusting claims. This section of the
chapter examines the basic objectives in adjusting
claims, the different types of claim adjustors, and
the various steps in the claim-settlement process.
Basic Objectives in Claims Settlement:
– Verification of a covered loss
– Fair and prompt payment of claims
– Personal assistance to the insured
19. Basic Objectives in Claims
Settlement
●
The first objective in settling claims is to verify that
a covered loss has occurred . This step involves
determining whether a specific person or property is
covered under the policy, and the extent of the
coverage.
●
The second objective is the fair and prompt
payment of claims . If a valid claim is denied, the
fundamental social and contractual purpose of
protecting the insured is defeated. Also, the insurer’s
●
reputation may be harmed, and the sales of new
policies may be adversely affected.
20. Basic Objectives in Claims
Settlement
●
●
Fair payment means that the insurer should avoid
excessive claim settlements and should resist the
payment of fraudulent claims, because they will
ultimately result in higher premiums.
Some unfair claim practices prohibited by these laws
include the following:
– Refusing to pay claims without conducting a reasonable
investigation.
– Not attempting in good faith to provide prompt, fair, and
equitable settlements of claims in which liability has
become reasonably clear.
– Compelling insureds or beneficiaries to institute lawsuits
21. Types of Claims Adjustors
●
●
The person who adjusts a claim is known as a
claims adjustor . The major types of adjustors
include the following:
– Agent
– Company adjustor
– Independent adjustor
– Public adjustor
An insurance agent often has authority to settle
small first-party claims up to some maximum
limit.he insurer, such as a small theft loss by the
insured. The insured submits the claim directly to
22. Types of Claims Adjustors
●
A company adjustor can settle a claim. The
adjustor is usually a salaried employee who repre-
sents only one company. After notice of the loss is
received, the company adjustor will investigate the
claim, determine the amount of loss, and arrange for
payment.
●
An independent adjustor can also be used to adjust
claims.An independent adjustor is an organization or
individual that adjusts claims for a fee.Property and
casualty insurers often use independent adjustors
when a catastrophic loss occurs in a given
geographical area.
23. Steps in Settlement of a Claim
●
●
There are several important steps in settling a claim
– Notice of loss must be given.
– The claim is investigated.
– Aproof of loss may be required.
– Adecision is made concerning payment.
Notice of Loss The first step is to notify the insurer
of a loss. A provision concerning notice of loss is
usually stated in the policy. A typical provision
requires the insured to give notice immediately or as
soon as possible after the loss has occurred.
24. Steps in Settlement of a Claim
●
Investigation of the Claim :After notice is
received, the next step is to investigate the
claim.The most important questions include the
following:
– Did the loss occur while the policy was in force?
– Does the policy cover the peril that caused the loss?
– Does the policy cover the property destroyed or damaged
in the loss?
– Is the claimant entitled to recover?
– Did the loss occur at an insured location?
– Is the type of loss covered?
25. Steps in Settlement of a Claim
●
●
Filing a Proof of Loss: An adjustor may require a
proof of loss before the claim is paid. A proof of loss
is a sworn statement by the insured that substantiates
the loss.
Decision Concerning Payment: After the claim is
investigated, the adjustor must make a decision con-
cerning payment. There are three possible decisions.
– The claim can be paid . In most cases, the claim is paid
promptly according to the terms of the policy.
– The claim can be denied . The adjustor may believe that
the policy does not cover the loss or that the claim is
fraudulent.
26. REINSURANCE
●
Reinsurance is an arrangement by which the
primary insurer that initially writes the insurance
transfers to another insurer (called the reinsurer) part
or all of the potential losses associated with such
insurance .
●
●
●
The primary insurer that initially writes the
insurance is called the ceding company .
The insurer that acceptspart or all of the insurance
from the ceding com pany is called the reinsurer .
The amount of insurance retained by the ceding
company for its own account is called the retention
27. Reasons for Reinsurance
●
●
The most important reasons include the following:
– Increase underwriting capacity
– Stabilize profits
– Reduce the unearned premium reserve
– Provide protection against a catastrophic loss
Reinsurance also enables an insurer to retire from a
territory or class of business and to obtain
underwriting advice from the reinsurer.
28. Reasons for Reinsurance
●
Increase Underwriting Capacity:The company
may be asked to assume liability for losses in excess
of its retention limit. Without reinsurance, the agent
●
would have to place large amounts of insurance with
several companies or not accept the risk.
Stabilize Profits: An insurer may wish to avoid
large fluctuations in annual financial results. Loss
experience can fluctuate widely because of social
and economic conditions, natural disasters, and
chance. Reinsurance can be used to stabilize the
effects of poor loss experience.
●
29. Reasons for Reinsurance
●
The unearned premium reserve is a liability item on
the insurer’s balance
unearned portion of
sheet that represents the
gross premiums on all
outstanding policies at the time of valuation .In
effect, the unearned premium reserve reflects the
fact that premiums are paid in advance, but the
period of protection has not yet expired. As time
goes on, part of the premium is considered earned,
while the remainder is unearned. It is only after the
period of protection has expired that the premium is
fully earned.
●
Reduce the unearned premium reserve:
30. Reasons for Reinsurance
●
●
Provide Protection Against a Catastrophic Loss:
Reinsurance can provide considerable protection to
the ceding company that experiences a catastrophic
loss. The reinsurer pays part or all of the losses that
exceed the ceding company’s retention up to some
specified maximum limit.
Other Reasons for Reinsurance:
– An insurer canu use reinsurance to retire from the
business or from a given line of insurance or territory.
– Reinsurance permits the insurer’s liabilities for existing
insurance to be transferred to another carrier; thus,
policyholders’coverage remains undisturbed.
31. Types of Reinsurance
●
●
●
●
There are two principal types of reinsurance: (1)
facultative reinsurance and (2) treaty reinsurance.
Facultative Reinsurance is an optional, case by
case method that is used when the ceding company
receives an application for insurance that exceeds its
retention limit Reinsurance is not automatic.
Reinsurance is not automatic. The primary insurer
negotiates a separate contract with a reinsurer for
each loss exposure for which reinsurance is desired.
Advantage of Facultative reinsurance
– Flexibility because it can be tailored to fit any type of
32. Types of Reinsurance
●
Disadvantages of Facultative reinsurance:
– There is some uncertainty because the primary insurer
does not know in advance whether a reinsurer will accept
any part of the insurance.
– There can also be a problem of delay because the policy
will not be issued until reinsurance is obtained.
reinsurance markets tend
– Finally, during periods of poor loss experience,
to tighten, and facultative
reinsurance may be more costly and more difficult to
obtain.
33. Types of Reinsurance
●
●
●
Treaty reinsurance means the primary insurer has
agreed to cede insurance to the reinsurer, and the
reinsurer has agreed to accept the business . All
business that falls within the scope of the agreement
is automatically reinsured according to the terms of
the treaty.
Advantages of Treaty reinsurance
– It is automatic, and no uncertainty or delay is involved.
– It is also economical, because it is not necessary to shop
around and negotiate reinsurance terms before the policy
is written.
34. Methods for Sharing Losses
●
●
●
●
There are two basic methods for sharing losses: (1)
pro rata and (2) excess-of-loss.
Under the pro rata method, the ceding company and
reinsurer agree to share losses and premiums based
on some proportion.
Under the excess-of-loss method, the reinsurer pays
only when covered losses exceed a certain level.
The following reinsurance methods for the sharing
of losses are examples of both methods:
1-Quota-share treaty 2-Surplus-share treaty 3-
Excess-of-loss reinsurance 4-Reinsurance pool
35. Methods for Sharing Losses
●
Quota-Share Treaty Under a quota-share treaty, the
ceding company and reinsurer agree to share
premiums and losses based on some proportion.The
●
ceding company’s retention is stated as a percentage
rather than as a dollar amount.
Premiums are also shared based on the same agreed-
on percentage.However, the reinsurer pays a ceding
commission to the primary insurer to help
compensate for the expenses incurred in writing the
business.
●
The major advantage of quota-share reinsurance is
36. Methods for Sharing Losses
●
Surplus-Share Treaty Under a surplus-share
treaty,the reinsurer agrees to accept insurance in
●
●
●
excess of the ceding insurer’s retention limit, up to
some maximum amount.
The retention limit is referred to as a line and is
stated as a dollar amount .
Under a surplus-share treaty, premiums are also
shared based on the fraction of total insurance
retained by each party.
The principal advantage of a surplus-share treaty is
that the primary insurer’s underwriting capacity on
37. Methods for Sharing Losses
●
●
Excess-of-loss reinsurance is designed largely for
protection against a catastrophic loss. The reinsurer
pays part or all of the loss that exceeds the ceding
company’s retention limit up to some maximum
level.
Excess-of-loss reinsurance can be written to cover
– (1) a single exposure,
– (2) a single occurrence, such as a catastrophic loss from a
tornado,
– (3) excess losses when the primary insurer’s cumulative
losses exceed a certain amount during some stated time
period, such as a year.
38. Methods for Sharing Losses
●
●
●
A reinsurance pool is an organization of insurers
that underwrites insurance on a joint basis .
Reinsurance pools have been formed because a
single insurer alone may not have the financial
capacity to write large amounts of insurance, but the
insurers as a group can combine their financial
resources to obtain the necessary capacity.
The method for sharing losses and premiums varies
depending on the type of reinsurance pool.
– First, each pool member agrees to pay a certain
percentage of every loss.
39. ALTERNATIVES TO
TRADITIONAL REINSURANCE
●
●
Many insurers and reinsurers are now using the
capital markets as an alternative to traditional
reinsurance.
Some insurers and reinsurers are using the capital
markets to gain access to the capital of
institutional investors.
●
Securitization of Risk: means that an insurable risk
is transferred to the capital markets through the
creation of a financial instrument, such as a
catastrophe bond, futures contract, options contract,
or other financial instrument.
40. ALTERNATIVES TO
TRADITIONAL REINSURANCE
● Catastrophe bonds are an excellent example of the
securitization of risk. Catastrophe bonds are
corporate bonds that permit the issuer of the bond to
●
skip or reduce scheduled interest payments if a
catastrophic loss occurs.
The bonds are complex financial instruments issued
by insurers and reinsurers and are designed to
provide funds for catastrophic natural disaster
losses.
●
typically purchased by
seeking higher-yielding,
Catastrophe bonds are
institutional investors