Mccloskey topic 10
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What are the 4 risk control goals of insurers?
- earn a profit
- meet customer needs
- comply with legal requirements
- fulfill duty to society
What is the main purpose of insurer risk control goals?
to evaluate loss exposures to assist underwriting
#1 risk control goal
earn a profit
#2 risk control goal
meet customer needs
#3 risk control goal
comply with legal requirements
#4 risk control goal
fulfill duty to society
How does risk control help insurers to reach profit goals?(3)
- improving underwriting decisions
- encouraging insureds to improve risk control
- reducing insureds losses
How does risk control help insurers to meet customer needs?(2)
- needs arising from legislation
- sound risk control makes accounts more attractive to underwriters
How does risk control help insurers to comply with legal requirements
some states require insurers to provide a minimum level of risk control service to commercial insureds
for what kind of policies do some states require insurers to provide a minimum level of risk control service to commercial insureds?
usually workers compensation and boiler and machinery
How does risk control help insurers fulfill duty to society?(1)
- for an insurer, preventing losses is preferable to paying for losses (ex occupational injuries cause pain and suffering)
- ex. a fire may cause employee layoffs and contingent business income losses for suppliers
What are the three types of risk control services insurers typically provide?
- conducting physical surveys
- performing risk analysis and improvement
- developing safety mgmt programs
_____ is when an insurer collects underwriting information on customers loss exposures
conducting physical surveys
what do insurers look for and do when conducting physical surveys?
- building construction types,worker occupations, fire protection systems etc
- inspects the premises and interviews mgmt
what do physical surveys give insurers a better understanding of?
- better idea of managements ability to control exposures
- also gain insight as to the extent of moral and morale hazards
Benefits of physical surveys to the underwriter(2)
- better understanding of loss exposures
- can quote assuming recommendations will be implemented
Benefits of physical surveys to the insured(3)
- better understanding of their loss exposures and steps that can be taken to reduce losses
- able to properly comply with regulations
- provide better working environment for employees
How does an insurer perform risk analysis and improvement?(2)
- When an insurer analyzes a customer's loss history and give recommendations to mgmt for reducing hazards that have led to previous losses
- and by providing training and info
What types of training and info does an insurer do insurers provide for ers?
- safety programs
- fire protection systems testing and evaluation
- preconstruction counseling
How do insurers establish safety mgmt programs?
- establish risk control goals
- select appropriate risk control measures
- establishing monitoring procedures
- Insurers risk control representative assists the client in all steps of the process except daily implementation(E&O liability)
What does risk control do for underwriters?
- it enables underwriters to make better underwriting decisions
- also helps to modify a new applicants loss exposures to meet eligibility requirements
- (this helps an applicant to remain within the insurer's guidelines)
______ are often the main communications link between the underwriter and the insured
risk control reps
how does risk control affect mktg and sales?(2)
- risk control helps make marginal accounts acceptable
- it can also convince the potential insured that the insurer understands the firms operations and associated hazards
How does risk control affect claims?(2)
- risk control needs claim experience info to direct risk control resources and efforts to crucial areas
- the claims dept relies on risk control for loss experience data and background info that can support the loss adjusting process
how does risk control affect producers?(2)
- some large agencies and brokerages maintain their own risk control dept
- if the insured is receiving risk control services from insurer and producer, the two services should coordinate with one another
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