What is the primary purpose of underwriting in the insurance industry? To help an insurer develop and maintain a growing, profitable book of business To ensure compliance with legal standards To increase the number of policyholders To minimize the number of claims

To help an insurer develop and maintain a growing, profitable book of business

What are the main roles of an underwriter in the insurance industry? Gatekeeper of risk, makes the final decision to accept or reject applicants, collaborates with other departments Claims processing, policy issuance, customer service Financial auditing, risk assessment, and compliance Marketing, sales, and customer retention

Gatekeeper of risk, makes the final decision to accept or reject applicants, collaborates with other departments

How can insurers prevent adverse selection in their underwriting process? Increase premiums for all policyholders Focus on high-risk applicants Carefully select applicants, charge appropriate premiums, monitor applications for unusual patterns Limit the number of policies issued

Carefully select applicants, charge appropriate premiums, monitor applications for unusual patterns

If the policy premium is greater than losses and expenses, what will happen to the policyholder surplus? The policyholder surplus will remain unchanged The policyholder surplus will decrease The policyholder surplus will increase The policyholder surplus will become negative

The policyholder surplus will increase

How can insurers ensure an adequate policyholder surplus? Follow underwriting guidelines, effectively evaluate and select loss exposures, charge adequate premiums Focus on high-risk applicants Increase the number of policies issued Reduce the number of claims processed

Follow underwriting guidelines, effectively evaluate and select loss exposures, charge adequate premiums

When are underwriters most effective in their roles? When focusing solely on risk assessment When they're collaborating with other departments When handling claims processing When working independently

When they're collaborating with other departments

Insurance Underwriting Principles: Risk Assessment and Policyholder Surplus Management

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Business - Insurance

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Cards in this deck(24)

What is the process of evaluating risks, selecting who can be insured, pricing the insurance coverage, determining policy terms/conditions, and monitoring these underwriting decisions called?

What is the primary purpose of underwriting in the insurance industry?

What are the main roles of an underwriter in the insurance industry?

What is the term for when a high-risk person benefits more from insurance and is more likely to purchase it, potentially leading to unprofitable business?

How can insurers prevent adverse selection in their underwriting process?

What is the term for the difference between an insurance company's assets and liabilities?

If the policy premium is greater than losses and expenses, what will happen to the policyholder surplus?

How can insurers ensure an adequate policyholder surplus?

What is a written manual that communicates an insurer's underwriting policy and specifies the attributes of an account that an insurer is willing to insure?

When are underwriters most effective in their roles?

What are the benefits of underwriters collaborating with other departments?

How do risk control professionals and premium auditors provide valuable information to underwriters?

How do risk control professionals offer help to underwriters?

How do premium auditors offer help to underwriters?

What is the role of a Field (Line) Underwriter in the insurance industry?

What is the role of a Corporate (Staff) Underwriter?

What are the steps involved in the underwriting process?

What is the method of premium determination that uses rates based on collected statistics and is also called class rating?

How do you calculate the premium for an insurance policy?

What is an exposure unit in the context of insurance?

What is a physical hazard in the context of insurance?

What is a moral hazard in the context of insurance?

What is a morale hazard in the context of insurance?

What are additional factors that can affect the premium of an insurance policy?

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