A warehouse bond is a type of corporate insurance that protects a company’s inventory from damage or loss. The bond is typically issued by a bank or insurance company and is used to secure a loan that is used to purchase the inventory. If the inventory is damaged or lost, the bond pays for the … Read more
The net amount at risk is the portion of an insurance policy’s limit that would be payable to the insured in the event of a covered loss. The net amount at risk is calculated by subtracting the policy’s deductible from the policy’s limit. What is meant by net premium? Net premium is the amount of … Read more
Longevity risk is the risk that a policyholder will live longer than expected and outlive their financial resources. This type of risk is most often associated with retirement income planning, where retirees face the risk of outliving their savings. Longevity risk can also be a factor in other financial planning scenarios, such as estate planning. … Read more
The actual total loss definition typically refers to a complete or nearly complete destruction of property where the cost to repair the damage exceeds the value of the property. In some cases, an actual total loss may also refer to business interruption losses suffered by a company. What do you mean by actual loss and … Read more
The Guideline Premium and Corridor Test (GPT) is a method used by insurance companies to assess the financial strength of a company. The test is used to determine whether a company has the ability to pay claims and meet policyholder obligations. The test is based on the assumption that a company will have a certain … Read more
The Bornhuetter-Ferguson technique is a method used to estimate the ultimate loss from an insurance policy. This technique is used when there is a lack of data on the historical claims experience for the policy in question. The technique relies on two key components: the expected loss ratio and the average claim size. The expected … Read more
Advance loss of profit (ALOP) insurance is a type of insurance that provides coverage for a business in the event that its profits are lost due to a covered event. This type of insurance can help to protect a business from financial ruin in the event that its profits are unexpectedly lost. What is fire … Read more
Net collections definition: The term “net collections” refers to the total amount of premiums collected by an insurance company, minus any claims paid out. This is the amount of money that the company actually has available to invest or use to pay operating expenses. How do you calculate collection percentage? The collection percentage is calculated … Read more
Losses incurred is the total amount of money that a company has spent on claims during a given period of time. This includes both the amount paid out in settlements and the amount paid in defense costs. What is loss reimbursement? Loss reimbursement is a type of insurance coverage that reimburses an insured party for … Read more
A fronting policy is an insurance policy that is issued by an insurance company on behalf of another company. The insurance company that issues the policy is known as the fronting company, while the company that the policy is issued for is known as the insured company. The fronting company agrees to pay any claims … Read more
