P92 Chapter 1

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sweetmc
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26251
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P92 Chapter 1
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2010-07-10 09:25:54
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Insurance business finance p92 structure insurance business acii
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ch 1: structure of the insurance busines
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  1. 3 types of insurance company
    • 1. Life
    • 2. General
    • 3. Composite
  2. 4 specific types of insurance company
    • 1. Proprietary
    • 2. Mutual
    • 3. Captive
    • 4. Takaful
  3. Business transacted by proprietary insurers and reinsurers
    • - accident & health
    • - motor
    • - aviation
    • - property
    • - liability
  4. Business transacted by mutual insurance companies
    • Long term business
    • - life & annuity
    • - permanent health
    • - pension fund management
    • - linked long-term
  5. Why are captive insurers set up?
    • - Tax efficient way of transacting risk transfer
    • - paying premiums based on the company's own experience
    • - avoidance of direct insurer's overheads
    • - ability to purchase reinsurance at a lower cost than conventional insurers
  6. Islamic law
    Shariah
  7. What fundamental Islamic priciples are broken by traditional insurance policies?
    1. gharar - uncertainty

    2. maisir - gambling

    3. riba - interest
  8. Takaful insurances embrace which islamic principles?
    1. mutuality & co-operation

    2. shared responsibility

    3. joint indemnity

    4. commmon interest

    5. solidarity
  9. 13 sellers of insurance
    • 1. Types on insurance companies (propietry, mutuals, takaful, captive)
    • 2. Lloyds
    • 3. direct insurers
    • 4. internet
    • 5. indempendent intermediaries
    • 6. agents
    • 7. building societies
    • 8. banks
    • 9. retailers & affinity groups
    • 10. travel agents & tour operators
    • 11. aggregators
    • 12. the state
    • 13. self-insurance
  10. How are direct insurers set up?
    A typical direct insurer would have a main administrative centre and maybe an u/w centre.

    It would not need an extensive branch network as most of their business is transacted over the telephone.

    • The main factors to consider when deciding the location of the insurer are:
    • - Cost of office space
    • - proximity of a suitable workforce
  11. What does Customer Relationship Management entail?
    • 1. offering a relationship focus rather than an enquiry focus
    • 2. understanding of customer buying patterns
    • 3. move to a proactive rather than a reactive environment
    • 4. adopt a "total relationship management" approach
    • 5. enhancing / complimenting additional revenue generation efforts
  12. What does a "total relationship management" approach involve?
    • 1. direct mail
    • 2. telemarketing
    • 3. direct selling
    • 4. cross selling
    • 5. customer service
    • 6. email
    • 7. internet
    • 8. face to face personal attention
  13. Actions management can take to gain an apprectiation of their stakeholders and their needs:
    • - identify stakeholders
    • - find out their expectations
    • - identify stakeholder's influence
    • - develop good relationships with key people
    • - identify views and attitudes towards company strategies & activities
    • - establish supportive stakeholders and find out who are not supportive
    • - find out how to win antagonistic stakeholders over.
  14. Stakeholders in an insurance company
    • 1. Shareholders
    • 2. Policy holders
    • 3. Investment analysts
    • 4. Reninsurers
    • 5. other insurers (competitors)
    • 6. employees
    • 7. Government & regulators
  15. What stakeholder interest does an investment analyst have in an insurance company?
    ...the performance of the company which depends on market perception of the future, influenced by:

    • * type and spread of business
    • * profitaility
    • * distributable reserves
    • * dividend policy
    • * management policy & ability
    • * general economic trends
  16. Central principals of CII code of ethics
    • 1. compliance with the code, relevant laws & regulation
    • 2. highest ethical standards and integrity
    • 3. act in the best intersts of each client
    • 4. high standard of service
    • 5. treating people fairly (non-discrimination)
  17. Participants in the London market
    • 1. member companies of the IUA (Internatioin Underwriters Association)
    • 2. other companies operating in London
    • 3. EU companies
    • 4. contact offices for foreign companies
    • 5. P & I clubs
    • 6. Pools - International Oil Insurers & British Insurance (Atomic Energy) Committee
    • 7. Lloyds
    • 8. Brokers
  18. Why London?
    • 1. polictical & economic stability
    • 2. Geographical location
    • 3. quality transport system
    • 4. Highly qualified workforce
    • 5. avialability of office space
    • 6. English is the business language
    • 7. Stable legal & regulatory environment
    • 8. Time zone
    • 9. Foreign presence
    • 10. Developed financial centre
    • 11. Centralisation
  19. Advantages of outsourcing...
    • - the business only pays for the functions that it needs
    • - gauranteed level of service set out in contract
    • - budgeting advantages
    • - access to specialist skills
    • - may lead to further partnership opportunities
    • - increased flexibility
  20. Advantages to delegated authority agreements to insurers
    • - access to business it may not normally have opportunities to see
    • - be able to obtain business in parts of the world where it has no office
    • - have the benefit of local expertise and knowlege
    • - acquire income at low cost & risk

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