General 2 Flashcards
(16 cards)
In a soft market insurance companies experience
reduced premium income and an increase in exposures
Which body is responsible for monitoring emerging risks to the UK
financial system and providing strategic direction for the regulatory
regime?
financial policy committee
The fair treatment of customers is a major theme of the Financial
Conduct Authority and the guidance to what this means is contained in
which key Principle?
6
in the underwriting cycle, an insurer has experienced a period of increased competition which has given rise to lower premiums, what is the most likely immediate impact to the insurer
lower profits
In the UK, what are Standard Industrial Classification codes mainly
used for?
compiling health and safety statistics
An insurance underwriter is able to calculate the expected value of
claims by combining
frequency and severity with associated probability.
What does an insurer charge that specifically reflects the risk that a
customer brings to the insurer’s pool?
Equitable premium.
What should an insurance underwriter do to avoid the unreliability of
past data when considering future claims analysis?
Use sound judgement based on experience.
What is a major drawback in using the burning cost method when
calculating an insurance premium?
Full allowance is not made for either claims or general inflation.
For which classes of business would an underwriter use claims
triangulation to assist in determining the past, present and future value
of claims?
Employers’ and public liability.
How would an actuary assist an underwriter in respect of an individual
risk analysis on a large and complex commercial risk?
Make claims projections.
What mechanism does the market research specialist Defaqto use to
depict comparisons in different insurers’ policy covers, terms and
conditions?
Star rating.
In addition to compensation claims for personal injury and illness
incidents against individuals and businesses, what classes of business
does the Claims and Underwriting Exchange (CUE) hold on its
database?
Household and motor.
Insurer X buys reinsurance protection for 25% of his portfolio and insurer Y
chooses a reinsurance arrangement that covers all amounts above a
predetermined level. What types of reinsurance are insurers X and Y buying?
X is buying quota share and Y is buying excess of loss.
Insurer X’s chief underwriter has used a catastrophe model to gauge the
likely impact on the portfolio due to flood claims. What level of certainty of future flood losses is this model likely to provide?
low
Stop loss reinsurance provides protection for
a portfolio of business over a 12 month period.
