A risk that cannot be covered by insurance. This could be because the risk is too great, or because the insurance company will not cover it. The company may have to self-insure, which means setting aside money to cover the risk. What is principle of insurable risk? The principle of insurable risk is that a … Read more
The American Insurance Association (AIA) is a trade association representing the property and casualty insurance industry in the United States. Founded in 1866, the AIA today has nearly 3,000 member companies, accounting for more than two-thirds of the U.S. property and casualty insurance market. Is AIA a life insurance Company? Yes, AIA is a life … Read more
ULAE are defined as “the portion of an insurer’s incurred loss and loss adjustment expenses that are not recoverable from reinsurance.” In other words, ULAE are those expenses that an insurer must absorb itself, rather than being able to recover from its reinsurers. There are a number of reasons why an insurer might not be … Read more
An administrative charge is a flat fee that is assessed by an insurance company to cover the costs of administering an insurance policy. This charge is typically assessed on a monthly basis, and is in addition to the premiums that are paid to cover the actual costs of the insurance coverage. What is an administrative … Read more
A Unit Linked Insurance Plan, or ULIP, is a type of life insurance product that offers the policyholder both insurance and investment benefits. The investment portion of the ULIP is invested in a mix of assets, including stocks, bonds, and mutual funds, and the policyholder can choose how their investment is allocated. The insurance portion … Read more
The frequency-severity method is a way for insurance companies to estimate the expected losses from future events. This method is also known as the chain ladder method. The frequency-severity method uses historical data to predict the likelihood (frequency) of future events and the severity of those events. The method starts with an estimate of the … Read more
Loss adjustment expenses (LAE) are the costs incurred by an insurance company to investigate and settle insurance claims. LAE includes the costs of claims adjusters, investigators, lawyers, and other professionals who handle claims on behalf of the insurer. LAE also includes the costs of any settlements or judgments awarded to the claimant. LAE is a … Read more
Underwriting fees are the fees charged by insurance companies to cover the cost of underwriting insurance policies. Underwriting fees are generally based on the premiums charged for the policy, the type of policy, and the risk involved. Which type of expenditure is underwriting commission? Underwriting commission is the type of expenditure that is used to … Read more
Actuarial risk is the inherent risk in an insurance company’s business arising from uncertainty in the frequency and severity of insurance claims. The purpose of actuarial science is to quantify this risk in order to manage and Pricing insurance policies in order to minimize the impact of adverse events on the company’s financial results. There … Read more
The term “rate on line” is insurance jargon for the price that an insurance company would charge for a particular insurance policy if the policy were purchased online. The “rate on line” is usually lower than the prices that the same insurance company would charge for the same policy if it were purchased through a … Read more
