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Chapter 5
Definitions
14
Insurance
Professional
02/06/2012

Additional Insurance Flashcards

 


 

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Term

UNDERWRITING PROFIT (LOSS)

Definition

Income an insurer earns from premiums paid by policyholders minus incurred lossses and underwriting expenses

Term
INCURRED LOSSES
Definition
The sum of paid losses and loss reserve adjustments for a period of time
Term
UNDERWRITING EXPENSES
Definition
  • Includes costs for acquiring new policies
  • general expenses for operations
  • taxes and fees
Term
LOSS RESERVES
Definition

Amounts designated by insurance companies to pay claims for losses that have already occurred but are not yet settled.

 

The 'best estimate' of the total amount that the insurer will pay in the future for a loss that has already occurred.

Term
POLICYHOLDERS' SURPLUS
Definition
Total admitted assets minus total liabilities
Term
LOSS EXPENSES
Definition
The expenses necessitated by the process of inv estigating and settling insurance claims according to the terms specified in the insurance policy
Term
STRATEGIES
Definition
Large-Scale plans for interacting with the business environment in order to achieve long-term goals
Term
TACTICS
Definition
The specific actions required by the organization to implement its strategy
Term
ACTIVITIES
Definition
Actions required by organizational units or depart,ents for completing a tactic
Term
TASKS
Definition
Defined limited assignments with target completion dates
Term
ROLLBACKS
Definition
Reductions in prices to a previous level
Term
CEDING COMPANY
Definition

The insurer that tranfers premiums and loss exposures to the reinsurer

Term
FIXED COSTS
Definition
Expenses that remain the same regardless of the amount of business an insurer writes
Term
VARIABLE COSTS
Definition
Expenses that change relative to premium volume increases or decreases
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