Insurance Underwriting

Insurance Underwriting

Introduction

The assignment is based on the defining and highlighting the concept of insurance and underwriting defining the important, main issues and how Mr. John manages his insurance portfolio. The report includes the concept of insurance and how Mr. John manages it for his family. On the other hand, the report also provides a detailed study of the insurance brooking services (Robinson, 2001).

People basically use insurance services to minimize the affect of any loss. Insurance is of different types and can cover a number of insurance like: fire insurance, life insurance, business insurance, home insurance etc. On the other hand, there are insurance underwriters too who are equally responsible for the assessing the risk and portfolio factor in an investment.

There is a difference between the insurance underwriters and the investment underwriters. The main task of an insurance underwriter is to analyze and evaluate the risk of insuring an asset or a personal one. Evaluation of risk is the most important task in insuring the asset because there are a number of things which needs to be evaluated at the time of insuring an asset.

From the evaluation of risk, an insurance underwriter would determine the cost and premium of the asset which the customer had to pay. Determination of correct pricing is important so as to depict the premium charges on that particular product.

All actions of an insurer against its insured are related and are a result of underwriting decisions. The subscription fundamentally fulfills the function of maintaining a business portfolio, formed by the policies of this insurer, which is growing and profitable.

The underwriting risk is reflected in observed claim volatility and the volatility in the run-off of claims. Claim volatility is commonly measured by the claim ratio: the sum of claims in a particular year divided by the premiums received. When claim ratio is over 100% in a particular year, it indicates that claims are higher than premiums received in that year and premiums have been insufficient to cover claims. It is appropriate here to measure the claim ratio net of reinsurance coverage.

Insurance Under writing

Insurance underwriting is the term that represents the whole process that involves decision making selective, acceptable risk, determining the premium to be charged, the terms of the contract and monitoring of decisions in terms of making insurance. All actions of an insurer against its insured are related and are a result of underwriting ...