保险学 Insurance Chapter 6.ppt

Chapter 6 Insurance Company Operations * * * Copyright ? 2011 Pearson Prentice Hall. All rights reserved. 6-* Copyright ? 2011 Pearson Prentice Hall. All rights reserved. Agenda Rating and Ratemaking Underwriting Production Claim settlement Reinsurance Investments 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 Total premiums charged must be adequate for paying all claims and expenses during the policy period Rates and premiums are determined by an actuary, using the company’s past loss experience and industry statistics Underwriting Underwriting refers to the process of selecting, classifying, and pricing applicants for insurance A statement of underwriting policy establishes policies that are consistent with the company’s objectives, such as Acceptable classes of business Amounts of insurance that can be written A line underwriter makes daily decisions concerning the acceptance or rejection of business Underwriting Important principles of underwriting: The primary objective of underwriting is to attain an underwriting profit The second principle is to select prospective insureds according to the company’s underwriting standards The purpose of underwriting standards is to reduce adverse selection against the insurer Adverse selection is the tendency of people with a higher-than-average chance of loss to seek insurance at standard rates. If not controlled by underwriting, this will result in higher-than-expected loss levels. Underwriting should also maintain equity among the policyholders One group of policyholders should not unduly subsidize another group Underwriting Underwriting starts with the agent in the field Information for underwriting comes from: The application The agent’s report An inspection report Physical inspection A physical examination and attending physician’s report MIB re