During a "hard" insurance market, a manufacturing company decided to self-insure its workers compensation loss exposure. The company hired a third party to administer the workers compensation claims. Even though the risk was being self-insured, the risk manager insisted that the third-party administrator maintain meticulous records. When asked why such detailed records were necessary, the risk manager replied, "So we have a good story to tell an insurance company next year." What did the risk manager mean?
Answer to relevant QuestionsName three speculative financial risks that may be considered by a risk manager.What is meant by "consolidation" in the insurance industry?A luncheon speaker stated that “the number of life insurers has declined sharply during the past decade because of the increase in company mergers and acquisitions, demutualization of insurers, and formation of mutual ...Describe the basic characteristics of a reciprocal exchange.a. Define the meaning of underwriting.b. Briefly explain the basic principles of underwriting.c. Identify the major sources of information available to underwriters.
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