Chapter 5 - Common Functions Within Insurance Organisations Flashcards Preview

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Flashcards in Chapter 5 - Common Functions Within Insurance Organisations Deck (43)
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1
Q

Who does strategy team usually in head office report to?

A

Chief executive and finance director

2
Q

Planning tool used by a strategy team will include a what

A

SWOT analysis

3
Q

Why might also in regards to strategic focus, a company decide to do business in other countries?

A

Spread their risk, e.g if catastrophic losses all in once place then business totally gone, whereas if spread about then they have less exposure.

4
Q

The essential role of the underwriting department is to what?

A

Calculate the premiums to be charged for the risks to be insured.

5
Q

Explain the underwriting hierarchy

A

From top to bottom

  • director of underwriting
  • head of department (e.g marine)
  • class underwriters
  • section supervisors
  • underwriters
  • assistant and trainee underwriters
6
Q

What is a pure risk premium?

A

The estimated amount of premium required to pay claims before expenses and profit and sometimes brokerage is added.

7
Q

Why to insurers delegate underwriting authority to other organisations?

A

Acquire business and reduce mangement expenses

8
Q

The party to whom authority has been delegated is known as the …

A

Coverholder

9
Q

An agreement called a ??????? ???????? Is set up between the parties, which sets out the scope and extent of the authority delegated to the cover holder.

A

Binding authority

10
Q

An agreement between an individual broker and a group of two or more insurers whereby each insurer or underwriter agrees to accept a pre agreed proportion of a specified type of insurance is known as a what?

A

Line slip

11
Q

The role of the claims department is to ensure what?

A

When claims are made, the policyholder receives a fair and equitable settlement for their loss, in accordance with the contractual obligations of the insurance policy.

12
Q

The job of the claims department is often one of managing expectations and protecting what?

A

The good reputation of the company for fair dealing.

13
Q

Identify seven roles of the marketing team in an insurance company

A

Seven from:

  • market research
  • competitior research
  • customer profiling, target markets or segmentation
  • development of strategic marketting plans
  • development of operational marketing plans
  • advertising
  • media relations
  • public relations and sponsership
  • product development
  • relationship management including sales management and customer service
14
Q

What is the purpose of marketing plan?

-

A
  • Identify target markets
  • Formulate marketing strategy
  • Control marketing operations
  • Monitor the successes of products of services
15
Q

The 4 types of actuaries are…?

A
  1. Pricing actuaries
  2. Reserving actuaries
  3. Modelling specialists
  4. Those who focus on solvency capital
16
Q

General pricing actuaries provide support to the underwriting team by doing what?

A

Predicting loss ratios within a stated range for a particular book of business,

17
Q

Reserving actuaries…

A

Undertake extensive reviews of the initial reserve set against a claim compared to the final costs in order to assess the trends in reserving movements.

18
Q

Under Solvency II internal model capital assessment, the programme that provides the capital estimate is known as what?

A

Calculation kernel

19
Q

Many organisations have created what role of take the lead of risk management activities?

A

Chief risk officer or head of risk mangement

20
Q

In regards to risk identification, what are some of the methods used?

A
  • brainstorming and risk workshops
  • site visits
  • scenario analysis
  • flow process analysis
21
Q

Risks that have been identified and analysed are then recorded in a…

A

Risk register.

22
Q

All insurance companies hold some form of asset in order to fund the business. What are three main types of asset….

A
  1. Premiums
  2. Claims reserves
  3. Shareholders funs, retained profits and loans
23
Q

What is the responsibility of the investment department?

A

Best return possible, while at the same time keeping the assets readily available to meet the expenses of running the business and to pay claims.

24
Q

What isa an example of a short term investment available to pay short tail claims

A

Cash at the bank

25
Q

Where equities are held, this is usually regarded as a what type of investment

A

Medium to long term

26
Q

Many life and pension firms hold part of their investments in commercial property - this is what type of investment?

A

Long term

27
Q

Descions regarding the insurances to be transacted, management of costs and expenses, investment strategy and capital raising and solvency ratios are all under the direct influence what function

A

Finance

28
Q

The legal and company secretary function of a company looks after all documentation, filings and registrations required by whom?

A

Companies house

29
Q

A key feature of the company secretary role is the organisation and operation of…

A

Board meetings and the meetings of board committees.

30
Q

The solicitor heading the in house legal department is sometimes known as …

A

General counsel

31
Q

When the company is entering a contract with for example an outsourcing supplier, exceeding a stated amount, e,g £25,000 who will it be referred to…

A

Legal team

32
Q

What is the key role of the compliance department ?

A

Ensure as far as possible, that the operations of the firm are compliant with regulatory requirements.

33
Q

Compliance will audit current processes and practices to make sure they do what

A

Conform to regulations.

34
Q

While the internal audit department covers all areas of the business, the key focus is on what?

A

The financial statements in the firms annual reports and accounts.

35
Q

A core role of the internal audit is to ensure the financial resources of the firm are protected against what?

A

Fraud and errors.

36
Q

Why does head of internal audit report to chairman of audit committee?

A

Maintain independence from the operating divisions, also allows open discussions of any problems found in the auditing work.

37
Q

The central function of IT is to what?

A

Establish the hardware requirements, including servers, desktop PCs and printers and the whole of the system of connections.

38
Q

What must be stablished so that people’s personal data is not accessed?

A

Security framework

39
Q

What does the HR function do?

A

Resourcing of staff and ensures the best practice recruitment, employment and staff development techniques are used.

40
Q

What are insurers second biggest costs after claims

A

Staff costs

41
Q

Why would Human Resources carry out external research?

A

Gain a picture of salaries and benefits being offered to people employed in similar roles in order to set a competitive package and attract candidates.

42
Q

The role of facilities management includes what?

A

Procurement of an office of other property to meet the accommodation needs to the company. T

43
Q

What is a hot site location?

A

Where the IT runs parallel in real time and the building can be occupied at short notice.