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API 29 - Personal Insurance
Portfolio Management - Chapter 5
14
Insurance
Professional
08/31/2012

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Cards

Term
Underwriting Profit
Definition
income an insurer earns from premiums paid by policyholders minus incurred losses and underwriting expenses.
Term
Incurred Losses
Definition
the sum of paid losses and loss reserve adjustments (changes in the loss reserves) for a period of time.
Term
Underwriting Expenses
Definition
include an insurer's cost for acquiring new policies, general expenses for operations, taxes, and fees.
Term
Loss Reserves
Definition
amounts designated by insurance companies for losses that have already occurred but are not yet settled. A loss reserve for a claim is the insurer's best estimate of the total amount that it will pay in the future for a loss that has already occurred.
Term
Policyholder's surplus
Definition
of an insurance company is equal to its total admitted assets minus its total liabilities.
Term
Loss expenses
Definition
sometimes called loss adjustments expenses (LAE), are the expenses necessitated by the process of investigating and settling insurance claims according to the terms specified in the insurance policy.
Term
Strategies
Definition
large-scale action plans for interacting with the buisness environment in order to acheive long-term goals
Term
Tactics
Definition
specific actions required by the organization to implement its strategy.
Term
Activities
Definition
actions required by organizational units or departments for completing a tactic.
Term
Tasks
Definition
defined limited assignments with target completion dates.
Term
Rollbacks
Definition
reductions in prices to a previous level. Often taken on a state or national level.
Term
Ceding Company
Definition
the insurer that cedes or transfers premiums and loss exposures to the reinsurer.
Term
Fixed Costs
Definition
expenses that remain the same, in the short term, regardless of the amount of buisness an insurer writes.
Term
Variable Costs
Definition
expenses that change relative to premuim volume increases or decreases.
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