Different Insurance Principles
» Large number of homogeneous exposure units-The vast majority of insurance policies are provided for individual members of very large classes.
» Definite Loss-The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause.
» Accidental Loss-The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance.
» Large Loss-The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims.
» Calculable Loss-There are two elements that must be at least estimatable, if not formally calculable, the probability of loss and the attendant cost.
» Limited risk of catastrophically large losses-The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed.
Different Insurance Principles Books
Insurance News
- Business Cool Toward McCain’s Health Coverage Plan 7 Oct 2008
Business leaders fear that John McCain’s proposal to revamp taxation of health benefits would help to erode employer-sponsored health insurance. - Employers Push White House to Disclose Medicare Data 11 Apr 2006
The nation’s largest employers say data on the cost and quality of care provided by doctors around the country would help rein in their health insurance costs. - Consumer Price Index Up 0.3%, Mostly Because of Gasoline 17 Oct 2003
Labor Department reports Consumer Price Index rose 0.3 percent in September; consumer prices rose 2.3 percent for 12 months ended in September; Federal Reserve says industrial production rose 0.4 percent in September compared with 0.1 percent drop in August; factory output rose 0.7 percent; Labor De… - Executives See Weak Economy Continuing 11 Apr 2003
Business Roundtable survey shows executives expect economy to remain weak over next six months but do not foresee new recession; finds only about one company out of 10 plans to increase employment in US in that period; some 90 percent of companies are divided almost evenly between those that plan jo…
