1.5 Insurance Operations Flashcards
(12 cards)
What are the core functions of an insurance company?
1) Marketing and Distribution
2) Claims
3) Underwriting
What does the Market and Distribution function entail?
determining what products or services customer want and need, advertising the products, delivering products to customers
What does the Underwriting function entail?
Determine whether and under what conditions the insurer is will to provide insurance coverage based on underwriting guidelines.
What does the Claims function entail?
Evaluate, settle, negotiate or litigate the settlement of claims
What are the supporting functions of an insurance company?
1) Risk Control
2) Premium Auditing
3) Actuarial
4) Reinsurance
5) Information Technology
What does the Risk Control function entail?
Provides information to the UW function to assist in selecting and rating risks
What does the Premium Audit function entail?
Reviews insured records to obtain accurate info on rating variables. Used either to verify stated insured collateral or collateral that varies such as wages paid
What does the Actuarial function entail?
Calculate insurance rates, develop rate plans, estimate loss reserves, provide predictive modeling services, conduct sensitivity analysis for financial security
What does the Reinsurance function entail?
Often a separate department that manages the transfer of part or all of a risk to other insurers
What does the Information Technology function entail?
Provides infrastructure that supports all internal and external communications, conduct daily operations, manage marketing efforts, underwrite policies, track investments, pay claims
What are other common functional areas of an insurance company?
1) Investments
2) Accounting and Finance
3) Customer Service
4) Legal and Compliance
5) Human Resources
6) Special Investigation Units (SIUs)
What are Special Investigations Units (SIUs)?
Teams that investigate and combat insurance fraud
