Property and Liability Insurance

INS 21

INS Certification Details

The program in General Insurance (INS) offered by AICPCU and IIA
The American Institute for Chartered Property Casualty Underwriters (AICPCU) and the Insurance Institute of America (IIA)

Three Exams
Property and Liability Insurance Principles (INS 21) Personal Insurance (INS 22) Commercial Insurance (INS 23)

Provides a solid foundation in insurance domain covering insurance principles, practices, and policies extensively

Confidential 2004 Syntel, Inc.

INS 21- Topics Covered

Insurance : What is it ? Who provides insurance and how it is regulated ? How is the financial performance of insurers measured? Marketing Underwriting Claims Insurance Contract Property Loss Exposures and Policy Provisions Liability Loss Exposures and Policy Provisions Risk Management Techniques

Confidential 2004 Syntel, Inc.

INS -21
Insurance : What is it ?

Insurance Definition
A Transfer System System of both transferring and sharing the costs of losses. Insured transfers the risk (chance of financial loss) to the other party called insurer (Insurance company) The insurer in turn pays for covered potential losses. Business Insurer generates enough of income to pay claims and provide reasonable profit to the company Contract Insured pays the stated premium to the insurer Expresses insurer's promise to pay for potential costs of loss Set of conditions (e.g. inclusions, exclusions, duties of both parties)

Confidential 2004 Syntel, Inc.

Insurance Principle
Law of Large Numbers As the number of similar but independent exposure units increases, the relative accuracy of predictions about future outcomes ( losses) based on exposure units also increases.

Confidential 2004 Syntel, Inc.

Loss Exposures
Property Loss Exposure: Presents the possibility of a loss to the property insured Real Property : Land and any property attached to it Personal Property: Property which is not real Liability Loss Exposure: Presents possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party. Human Loss Exposure: Can cause financial loss to individuals/family because of death, disability or unemployment. Personnel Loss Exposure: Can cause financial loss to businesses because of employees death, resignation, retirement, disability.

Confidential 2004 Syntel, Inc.

Ideally Insurable Loss Exposures

Large Number of similar exposure units Losses that are accidental Losses that are Definite and Measurable Losses that are not catastrophic Losses that are economically feasible to insure

Confidential 2004 Syntel, Inc.

Insurance Operations
Marketing : Identifying customers and selling and delivering a product or services. It enables insurers to reach potential customers and retail current ones. Other aspects of marketing are advertising and marketing management. Underwriting : Decides the potential customers to insure and type of coverage to offer. Ratemaking : Decides the premium to charge to the millions similar but independent insured Claim Handling : Investigates the nature of the loss ( covered or not not ) and if so the amount needs to be paid for the loss

Confidential 2004 Syntel, Inc.

Benefits of Insurance
Payment for the cost of covered losses Reduction of the insureds financial uncertainty Loss control activities of insurance companies Efficient use of resources Support for credit Satisfaction of legal requirements Satisfaction of business requirements Source of investment funds Reduction of social burdens

Confidential 2004 Syntel, Inc.

Costs of Insurance
Premiums paid by insured Insurers must charge premiums in order to have the fund necessary to make a loss payment Operating costs by insurers Cost that must be paid to run day-to-day operations of the insurance company. Costs include salaries, agent commissions, advertising, building expenses, taxes etc. Opportunity costs Resources the insurance industry uses in its operations represent lost opportunities in other areas Increased losses Existence of insurance might encourage losses to some extent. Carelessness and inflated claims by insured are common examples. Increased lawsuits Many people seem to view liability insurance as a pool of money available to anyone who has suffered injury or damage,with little regard given to fault.

Confidential 2004 Syntel, Inc.

General Insurance
Property Insurance Fire and allied lines insurance Business Income insurance Crime Ocean Marine insurance Inland Marine Insurance Liability Insurance Auto liability Commercial general liability Personal liability Professional liability

Confidential 2004 Syntel, Inc.

Life and Health Insurance

Life Insurance Whole Life Insurance Term Insurance Universal Life Insurance Health Insurance Medical Insurance Disability Income Insurance

Confidential 2004 Syntel, Inc.