Insurance

Premium

Examples of Demographic Factors Considered in Premium

calculation

• Life Insurance - Age

• Car Insurance – Gender

• Employee Insurance – Number of dependents

How can insurance premiums be reduced?

• Reduce your risk

• Choose an excess

• Waiting Periods

Claims

Policy holder files a claim

Adjuster / Appraiser evaluates the

insurance claim

Claim is accepted / rejected

If the claim is accepted, money is

disbursed

When is a claim rejected?

• Premiums are not paid

• Another insurance company may have already agreed to pay for

the damages

• Claim does not fall under covered conditions

E.g. If the accident or damage claim was caused by carelessness or an

unavoidable "Act of God", the insurance company has the right to

withhold payments.

Pooling of Risks

Large number of

people

Paying Premium

To the people who

claim because of

death, accident or any other incident

covered by Insurance

Underwriter

Origin of the term - Lloyds of London

The term is used in a number of industries, for example;

• an insurance company,

• an investment bank, or

• an individual sponsor of an event.

Proposal form – Utmost Good Faith Interim Protection

•The duty of utmost good faith implies that a proposer must disclose to

the insurer all material facts in regard to the proposed insurance.

•This duty applies not only to the material facts which he knows but

also extends to material facts which he ought to know.

Your Turn!

Consider a home buildings policy which provides cover against Fire, Theft

and Flood. What features of the building would be relevant to the

insurance company and why?

Division of non-life insurance policies

Most non-life policies are divided into sections comprising:

1. The recital clause, in which the names of the parties are given.

2. The operative clauses, otherwise termed the insuring clauses, in

which the scope of the cover is clearly defined and any

exceptions set out.

3. The attestation clause or signature clause, where the insurers

alone (by one of their officials)sign the document.

4. The schedule in which, for property insurance, the description of

the property is set out; and

5. The condition to which the insurance is subject.