Underwritting in Insurance Sector

8/13/2019 Underwritting in Insurance Sector

http://slidepdf.com/reader/full/underwritting-in-insurance-sector 1/80

Underwriting in Insurance Sector 1

http://www.google.co.in/imgres?imgurl=http://4.bp.blogspot.com/_wM_OZdOMR_Y/R0wPJJkB-wI/AAAAAAAAAUU/YH-VO83EG9k/s320/Using-Hedge-Funds-Financial-Planning.jpg&imgrefurl=http://richard-wilson.blogspot.com/2007/11/using-hedge-funds-in-financial-planning.html&usg=__Ea_9XiWQBXY3UChyxhriWtmnO8E=&h=300&w=300&sz=71&hl=en&start=11&itbs=1&tbnid=_dVuLiCCLJGe6M:&tbnh=116&tbnw=116&prev=/images%3Fq%3Dfinancial%2Bplanning%26hl%3Den%26sa%3DG%26tbs%3Disch:1



Underwriting in Insurance Sector

PROJECT ON:

UNDERWRITING IN INSURANCE SECTOR

BY:

Ms. MONALI P. !OIR

T."..Co# $an%ing & Insurance'

2



INTRODUCTION OF UNDERWRITING

“TT(e )rocess t(at a *arge +inancia* ser,ice )ro,ider -an%/ insurer/

in,est#ent (ouse0 uses to assess t(e )rocess o+ )ro,iding access to t(eir

)roduct *i%e )ro,iding e1uit2 ca)ita*/ insurance or credit to a custo#er3

T(e na#e deri,es +ro# t(e L*o2d4s o+ London insurance #ar%et in

London/ United 5ingdo#. 6inancia* ac%ers/ w(o wou*d acce)t so#e o+ t(e

ris% on a gi,en ,enture -(istorica**2 a sea ,o2age wit( associated ris%s o+

s(i)wrec%0 in e7c(ange +or a )re#iu#/ wou*d *itera**2 write t(eir na#es

under t(e ris% in+or#ation w(ic( was written on a L*o2d4s s*i) created +or

t(is )ur)ose.


INTRODUCTION

Inside story8

• E#)*o2#ent in t(e +ie*d o+ underwriting

• Training/ ot(er 1ua*i+ications/ and

ad,ance#ent gi,en to t(e underwriter

•

Nature o+ t(e wor% o+ t(e underwriters• Underwriting in genera*

• Underwriting in insurance

3



In an%ing/ underwriting is t(e detai*ed credit ana*2sis )receding t(e

granting o+ a *oan/ ased on credit in+or#ation +urnis(ed 2 t(e orrower/

suc( as e#)*o2#ent (istor2/ sa*ar2/ and +inancia* state#ents9 )u*ic*2

a,ai*a*e in+or#ation/ suc( as t(e orrower4s credit (istor2/ w(ic( is detai*ed

in a credit re)ort9 and t(e *ender4s e,a*uation o+ t(e orrower4s credit needs

and ai*it2 to )a2. Underwriting can a*so re+er to t(e )urc(ase o+ cor)orate

onds/ co##ercia* )a)er/ Go,ern#ent securities/ and #unici)a* genera*

o*igation onds 2 a co##ercia* an% or dea*er an% +or its own account/ or

+or resa*e to in,estors. an% underwriting o+ cor)orate securities is carried

out t(roug( se)arate (o*ding co#)an2 a++i*iates/ ca**ed securities a++i*iates/ or

Section :; a++i*iates.

EMPLOYMENT IN THE FIELD OF UNDERWRITING:

IInsurance underwriters (e*d aout <;</;;; =os in :;;>.

A))ro7i#ate*2 : out o+ ? underwriters wor% +or insurance carriers. Most o+




t(e re#aining underwriters wor% in insurance agencies or +or organi@ations

t(at o++er insurance ser,ices to insurance co#)anies and )o*ic2(o*ders. A

s#a** nu#er o+ underwriters wor% in agencies owned and o)erated 2

an%s/ #ortgage co#)anies/ and rea* estate +ir#s.

Most underwriters are ased in t(e insurance co#)an2s (o#e o++ice/

ut so#e/ #ain*2 in t(e )ro)ert2 and casua*t2 area/ wor% out o+ regiona*

ranc( o++ices o+ t(e insurance co#)an2. T(ese underwriters usua**2 (a,e

t(e aut(orit2 to underwrite #ost ris%s and deter#ine an a))ro)riate rating

wit(out consu*ting t(e (o#e o++ice.

TRINING! OTHER "ULIFICTION#! ND D$NCEMENT

GI$EN TO THE UNDERWRITER:

66or entr2B*e,e* underwriting =os/ #ost *arge insurance co#)anies

)re+er co**ege graduates w(o (a,e a degree in usiness ad#inistration or

+inance wit( courses or e7)erience in accounting. Underwriting can e a

satis+2ing career +or )eo)*e w(o en=o2 ana*2@ing in+or#ation and )a2ing

attention to detai*. In addition/ underwriters #ust )ossess good =udg#ent in

order to #a%e sound decisions. E7ce**ent co##unication and inter)ersona*

s%i**s a*so are essentia*/ as #uc( o+ t(e underwriters wor% in,o*,es dea*ing

wit( agents and ot(er insurance )ro+essiona*s.




Continuing education is necessar2 +or ad,ance#ent. Insurance

co#)anies usua**2 )a2 tuition +or underwriting courses t(at t(eir trainees

co#)*ete9 so#e a*so o++er sa*ar2 incenti,es. Inde)endentBstud2 )rogra#s +or

e7)erienced )ro)ert2 and casua*t2 underwriters are a,ai*a*e as we**. T(e

Insurance Institute o+ A#erica o++ers ot( a )rogra# ca**ed Introduction to

Underwriting3 +or eginning underwriters/ and t(e s)ecia*t2 designation o+

Associate in Co##ercia* Underwriting -ACU0/ a +or#a* ste) in de,e*o)ing

a career in underwriting usiness insurance )o*icies. T(ose interested in

de,e*o)ing a career underwriting )ersona* insurance )o*icies #a2 earn t(e

Associate in Persona* Insurance -API0 designation. To earn eit(er t(e ACU

or API designation/ underwriters co#)*ete a series o+ courses and

e7a#inations t(at genera**2 *ast < to : 2ears.

NTURE OF THE WOR% OF THEUNDERWRITER#:

IInsurance co#)anies )rotect indi,idua*s and organi@ations +ro#

+inancia* *oss 2 assu#ing i**ions o+ do**ars in ris% eac( 2ear. Underwriters

are needed to identi+2 and ca*cu*ate t(e ris% o+ *oss +ro# )o*ic2(o*ders/

esta*is( a))ro)riate )re#iu# rates/ and write )o*icies t(at co,er t(is ris%.

An insurance co#)an2 #a2 *ose usiness to co#)etitors i+ t(e

underwriter a))raises ris%s too conser,ati,e*2/ or it #a2 (a,e to )a2

e7cessi,e c*ai#s i+ t(e underwriting actions are too *iera*. Tec(no*og2

)*a2s an i#)ortant ro*e in an underwriters =o. Underwriters use co#)uter

a))*ications ca**ed s#art s2ste#s3 to #anage ris%s #ore e++icient*2 and




accurate*2. T(ese s2ste#s auto#atica**2 ana*2@e and rate insurance

a))*ications/ reco##end acce)tance or denia* o+ t(e ris%/ and ad=ust t(e

)re#iu# rate in accordance wit( t(e ris% and dose etter e1ui))ed to #a%e

sound decisions and a,oid. Most underwriters s)ecia*i@e in one o+ t(ree

#a=or categories o+ insurance8 *i+e/ (ea*t(/ and )ro)ert2 and casua*t2.

Pro)ert2 and casua*t2 underwriters usua**2 s)ecia*i@e in eit(er co##ercia*

or )ersona* insurance and t(en 2 t2)e o+ ris% insured/ as in +ire/

(o#eowners/ auto#oi*e/ #arine/ or *iai*it2 insurance/ or wor%ers

co#)ensation. In cases w(ere casua*t2 co#)anies )ro,ide insurance

t(roug( a sing*e )ac%age3 )o*ic2 co,ering ,arious t2)es o+ ris%s/ t(e

underwriter #ust e +a#i*iar wit( di++erent *ines o+ insurance.

UNDERWRITING IN GENERL:

AAs +inancia* #ar%ets de,e*o)/ t(e *ines etween ca)ita* #ar%ets and

insurance )roducts are *urring. T(e conce)tua* si#i*arities etween +inancia*

o)tions and insurance contracts are se*+Be,ident B a )a2out occurs gi,en a

certain e,ent +or an under*2ing )(2sica* or +inancia* o=ect. 6inancia* o)tions

o,er t(e )ast +ew 2ears (a,e #ode*ed increasing*2 co#)*e7 structures/ wit(

e,er #ore under*2ing ,aria*es/ and t(ese ,aria*es t(e#se*,es are su=ect to

increasing ,agaries. 6or centuries/ t(e insurance industr2 (as )riced




)re#iu#s ased on a co#ination o+ 1uantitati,e #ode*s/ +inancing needs

and a co##ercia* assess#ent o+ su))*2 and de#and.

Ris% Care (a,e underta%en )ro=ects +or a ,ariet2 o+ insurance sectors/

re)*icating )re#iu# )ricing +unctiona*it2 t(at (as een )rotot2)ed in a

s)reads(eet into roust dataase so*utions/ ca)a*e o+ (and*ing a *arge

,o*u#e o+ users and )ro,iding internet access. T(ese (a,e een tig(t*2

integrated wit( wor%+*ow s2ste#s/ su))orting t(e +u** range o+ )rocesses +or

a))*ications/ renewa*s and c*ai#s. O,er t(e co#ing 2ears/ we e7)ect to e

satis+2ing a sustantia* range o+ custo#er re1uire#ents as we a))*2 an e,erB

increasing a#ount o+ our ca)ita* #ar%ets %now*edge and e7)erience. Our

)ricing e7)ertise wi** e use+u* +or insurance )re#iu#s/ and our ris%

#anage#ent e7)ertise wi** e use+u* +or ca)ita* )ro,isioning.

Underwriting is---

<. T(e )rocess o+ issuing insurance )o*icies

:. T(e )rocess 2 w(ic( in,est#ent an%ers raise in,est#ent ca)ita* +ro#

in,estors on e(a*+ o+ cor)orations and go,ern#ents t(at are issuing

securities -ot( e1uit2 and det0.




In,esto)edia Sa2s8 T(e word underwriter is said to (a,e co#e +ro#

t(e )ractice o+ (a,ing eac( ris%Bta%er write (is or (er na#e under t(e tota*

a#ount o+ ris% t(at (e or s(e was wi**ing to acce)t at a s)eci+ied )re#iu#. In

a wa2/ t(is is sti** true toda2/ as new issues are usua**2 roug(t to #ar%et 2

an underwriting s2ndicate in w(ic( eac( +ir# ta%es t(e res)onsii*it2 -and

ris%0 o+ se**ing its s)eci+ic a**ot#ent.

UNDERWRITING IN IN#URNCE:

UUnderwriting #a2 a*so re+er to insurance9 insurance underwriters

ca*cu*ate (ow ris%2 it is to insure )eo)*e and usinesses. T(e2 a*so decide

(ow #uc( co,erage t(e2 s(ou*d recei,e and (ow #uc( t(e2 s(ou*d )a2 +or

it. Underwriting in,o*,es #easuring ris% e7)osure and deter#ining t(e

)re#iu# t(at needs to e c(arged to insure t(at ris%. T(e +unction o+ t(e

underwriter is to write usiness t(at wi** #a%e t(e insurance co#)an2 #one2/

and to )rotect t(e co#)an24s oo% o+ usiness +ro# ris%s t(at t(e2 +ee* wi**

#a%e a *oss. In si#)*e ter#s/ it is t(e )rocess o+ issuing insurance )o*icies.

Eac( insurance co#)an2 uses its own set o+ underwriting guide*ines in order

to deter#ine w(et(er or not t(e co#)an2 s(ou*d acce)t a )ro)osa*. In *i+e

insurance t(is decision )rocess so#eti#es re1uires t(at a))*icants )ro,ide

+urt(er #edica* e,idence. T(e underwriters can decide to #a%e a countero++er




in w(ic( t(e )re#iu#s (a,e een *oaded/ or in w(ic( ,arious e7c*usions

(a,e een sti)u*ated/ w(ic( restrict t(e circu#stances under w(ic( a c*ai#

wou*d e )aid. So#e co#)anies use auto#ated underwriting s2ste#s to

encode t(ese ru*es.




UNDERWRITING MNGEMENT :


RE$IEW OF LITERTURE

Inside story8

• Underwriting #anage#ent oo%

• www.goog*e.co#

• www.#otor insurance.co#

• Insurance #anage#ent )rinci)*e and )ractices

• Indian insuranceBa )ro+i*e

11

http://www.google.com/




Insurance is created w(en )eo)*e *i%e 2ou and 2our neig(ors )oo*

t(eir resources to )rotect t(e#se*,es +ro# t(e e++ects o+ a *oss.

WWW&GOOGLE&COM:

“6ire underwriting3 descries t(e tec(nica* as)ects o+ conducting t(e

usiness o+ insurance o+ +ire ris% as o))osed to t(e ad#inistrati,e/ +inancia*

and organi@ationa* as)ects o+ t(e usiness.

WWW& MOTOR IN#URNCE&COM :

T(e #otor Insurance re1uires t(e )ro)oser to co#)*ete a )ro)osa*

+ro# t(at re,ersa*/ 2 t(e answers to t(e 1uestions t(e #ateria* +acts t(at

a++ected t(e ris%.

IN#URNCE MNGEMENT PRINCIPLE ND PRCTICIE# :

In t(is oo% t(e aut(or (a,e gi,en a descri)ti,e e7)*anation

aout ,arious as)ects o+ insurance sector. T(e2 (a,e ,er2 strong*2

(ig(*ig(ted t(e i#)ortance o+ underwriting

INDIN IN#URNCE' PROFILE8

It (as +ocused on underwriting ru*es and regu*ation. !e gi,es a

descri)ti,e e7)*anation on underwriting ru*es and regu*ation and *ega*

+ra#ewor%.


http://www.motorinsurance.com/






BOUT IN#URNCE ND IT(# WOR%ING

Inside story8

• Conce)t o+ ris% )oo*ing and s(aring

• C*assi+ication o+ insurance

• Underwriter decision #a%ing

13



CONCEPT OF RI#% POOLING ND #HRING:CONCEPT OF RI#% POOLING ND #HRING:

MMan2 )eo)*e *oo% at insurance co#)anies as ig/ i#)ersona*

institutions t(at can asor *oss regard*ess o+ cause or conse1uence. Not(ing

cou*d e +urt(er +ro# t(e trut(. T(e conce)t o+ insurance can e 1uic%*2

reduced to ,er2 )ersona* ter#s i+ 2ou t(in% aout it as ris% s(aring or )oo*ing.

Insurance is created w(en )eo)*e *i%e 2ou and 2our neig(ors )oo* t(eir

resources to )rotect t(e#se*,es +ro# t(e e++ects o+ a *oss. W(et(er t(e *oss

t(e2 are atte#)ting to )rotect t(e#se*,es +ro# is *oss o+ *i+e/ disai*it2/ +ire/

or w(ate,er/ t(e asic conce)t re#ains t(e sa#e8 i+ t(e ris% o+ *oss can e

s)read o,er a *arge enoug( grou)/ t(e e++ects o+ t(e *oss to an2 one indi,idua*

can e #ini#i@ed. Rat(er t(an one )erson earing t(e +u** runt o+ econo#ic

*oss/ eac( )erson in t(e grou) s(ares a )art o+ t(e ris% 2 #a%ing a )a2#ent

into a +und +ro# w(ic( c*ai#s are )aid.

W(i*e t(is descri)tion #a2 see# too si#)*e/ t(e trut( is t(at #an2 o+

toda24s #odern insurance co#)anies (ad t(eir eginnings in =ust t(ese t2)es

o+ grass roots settings. Ear*2 *i+e insurance associations were o+ten grou)s o+

wor%ers anding toget(er to )rotect against t(e econo#ic *oss t(at a

#e#er4s +a#i*2 #ig(t e7)erience/ s(ou*d a wor%er die )re#ature*2. 6ire

associations started ac% in co*onia* ti#es were not #uc( #ore t(an a grou)

o+ )ro)ert2 owners )oo*ing t(eir resources in case one o+ t(e# *ost )ro)ert2

to +ire. W(i*e t(is e1uation (as eco#e so#ew(at #ore intricate and




co#)*e7 o,er t(e 2ears/ it sti** (as at its core t(e sa#e asic conce)t o+ ris%

)oo*ing or s(aring.

CL##IFICTION OF IN#URNCE:

LLi+e is +u** o+ uncertaint2. Tria*s and triu*ations aound in eac( and

e,er2 as)ect o+ *i+e. No one can tru*2 )redict or e,en esti#ate w(at t(e

+uture (as in store +or (i#. Li+e o++ers no guarantees 2 itse*+/ e7ce)t t(e

incidences o+ deat( and ta7ation.

T(is *ac% o+ securit2 )resent t(roug(out *i+e can e o,erco#e

)artia**2 t(roug( insurance. Insurance can ne,er re)*ace or re)air a *oss. ut

t(e #onetar2 ,a*ue o++ered 2 insurance (e*)s in ad=usting to t(e new

circu#stances.

Des)ite o++ering innu#era*e o)tions and i##ense sco)e/ insurance

can e c*assi+ied into +our #ain categories.

Insurance o+ Person

Insurance o+ Pro)ert2

Insurance o+ Interest

Insurance o+ Liai*it2




)*)* Ins+r,n-e O. Person:Ins+r,n-e O. Person:

Under t(e )ur,iew o+ t(is c*ass o+ insurance/ t(e ris%s associated wit(

(u#an *i+e in genera* can e co,ered u) to t(e *i#it s)eci+ied. A )erson can

insure (is or (er *i+e and (is (ea*t( against an2 un)*anned contingencies.

In e,ent o+ (is deat(/ (is de)endants wi** e rei#ursed to t(e +u**

a#ount t(at (e was insured +or. Or i+ t(e insured )erson #eets wit( an

accident or su++ers +ro# an i**ness t(at cri))*es (i# +ore,er/ (e wi** e

co#)ensated wit( t(e co#)*ete su# assured an2wa2 since (e #a2 not e

a*e to *ead a nor#a* *i+e again.

In case/ t(e accident is not t(at se,ere/ (e s(ou*d e a*e to reco,er

a+ter #edica* treat#ent and re(ai*itation. I+ (e (as o)ted +or #edica* co,er/

t(en (is #edica* e7)enses/ treat#ent and #edication wi** e )aid +or 2 (is

insurance )o*ic2.

/*/* Ins+r,n-e O. Pro0erty:Ins+r,n-e O. Pro0erty:

E,er2one )ossesses #ateria* ,a*ue in t(e +or# o+ tangi*e assets.

Assets can e in t(e +or# o+ a *anded estate or a ,e(ic*e/ s(are (o*dings or

)*ain o*d )a)er #one2. Since tangi*e )ro)ert2 (as a )(2sica* s(a)e and

consistenc2/ it is su=ect to #an2 ris%s ranging +ro# +ire/ a**ied )eri*s to

t(e+t and roer2. An indi,idua*4s *i+eti#e o+ (ard wor% can e wi)ed out in

a *in% o+ an e2e. ut i+ a )erson =udicious*2 in,ests in insurance +or (is




)ro)ert2 )rior to an2 une7)ected contingenc2 t(en (e wi** e suita*2

co#)ensated +or (is *oss as soon as t(e e7tent o+ da#age is ascertained.

1*1* Ins+r,n-e O. Interest:Ins+r,n-e O. Interest:

E,er2 indi,idua* (as to disc(arge certain s)eci+ic duties. E,er2one is

e7)ected to #aintain a standard o+ conduct. ut t(en/ it is an intrinsic )art o+

(u#an nature to err. No one is in+a**i*e and no one wi** e,er e. Owing to

an occasiona* error or o#ission co##itted 2 us/ our c*ients or custo#ers

#ig(t su++er a *oss. In turn we #ig(t (a,e to )a2 t(ose da#ages or

co#)ensation out o+ our own )ersona* resources. !owe,er/ i+ our c(osen

)ro+ession 1ua*i+ies +or insurance o+ interest/ t(en our insurance )o*ic2 wi**

#ore t(an su++ice in arranging +or t(e +unds and court +or#a*ities t(at #ig(t

ensue in t(e a+ter#at( o+ *ega* *ie*.

2*2* Ins+r,n-e O. Li,3i4ity:Ins+r,n-e O. Li,3i4ity:

E,er2 )erson (as to regu*ate (is actions and e(a,ior so as not to

cause in=ur2 or da#age to ot(er )eo)*e and t(eir )ro)ert2. E,er2one is

)ersona**2 res)onsi*e and *ia*e +or (is actions. I+ due to *ac% o+ contro*

o,er (is actions or )re=udiced e(a,ior/ a )erson incurs an2 *iai*it2 t(en (e

(as to )ro,ide co#)ensation out o+ (is )ersona* resources. Liai*ities8 *ega*/

ci,i* or cri#ina* can (a,e se,ere re)ercussions on socia* standing and

)restige esides t(e +inancia* status.




2 in,esting in *iai*it2 insurance/ an indi,idua* can ward o++ an2

*iai*ities (e #ig(t incur due to (is actions and e(a,ior. esides/ t(e

)re#iu#s )a2a*e on *iai*it2 insurance are +air*2 #ini#a* w(en co#)ared

to t(e da#ages t(at (a,e to e co#)ensated in t(e *ong run.

UNDERWRITER DECI#ION M%ING:

ased on t(e in+or#ation )ro,ided t(e a))*ication/ agent and

de,e*o)#ent o++icer/ t(e underwriter ana*2ses t(e a))*ication. T(e

underwriter a+ter ana*2@ing t(e in+or#ation ta%es t(e a))ro)riate decision.

T(e2 are as +o**ows8

<. Acce)t t(e )ro)osa* at t(e co#)an2s )u*is(ed rates +or t(e )*an.

:. Acce)t on Modi+ied ter#s su=ect to additiona* +inance o+ an2 ot(er

#edica* e7a#ination.

?. Post)one t(e consideration o+ t(e insurance )ro)osa*.

>. Dec*ine t(e case.





UNDERWRITING IN LIFE IN#URNCEUNDERWRITING IN LIFE IN#URNCE

Inside story8

•• Met(ods o+ underwritingMet(ods o+ underwriting

•• Nu#erica* rating #et(od Nu#erica* rating #et(od

•• Ad,antage o+ nu#erica* ratingAd,antage o+ nu#erica* rating #et(od #et(od

• Co#)onents o+ *i+e insurance )ricing

• 6actors are considered in indi,idua* *i+e insurance

underwriting

• outsourcing o+ underwriting acti,ities in insurance

ad,antage and disad,antages

19

http://in.wrs.yahoo.com/_ylt=A0WTf2mK4nxLNDEADu69HAx.;_ylu=X3oDMTBpZm5udGl1BHBvcwM1BHNlYwNzcgR2dGlkAw--/SIG=1gl8sg3th/EXP=1266562058/**http:/in.images.search.yahoo.com/images/view?back=http://in.images.search.yahoo.com/search/images?p=life+insurance+policy&rs=1ni%3D18&fr=sfp&w=479&h=360&imgurl=www.godirect.co.uk/images/life_insurance_policy.JPG&rurl=http://bookintheoven.blogspot.com/&size=72k&name=life+insurance+p...&p=life+insurance+policy&oid=702e159fc6c0bbc2&fr2=&no=5&tt=23073&sigr=112tfc9bt&sigi=11j4356h5&sigb=12qjkhkqh



UNDERWRITING IN LIFE IN#URNCE:UNDERWRITING IN LIFE IN#URNCE:

T(e underwriting o+ a *i+e insurance )o*ic2 is t(e )rocess o+ t(e *i+e

insurance co#)an2 underwriter deciding w(et(er to insure )eo)*e and at

w(at rate ased on )eo)*e #edica* (istor2 and t(e acti,ities t(at 2ou #a2

engage in suc( as certain s)orts or +*2ing an air)*ane. Li+e insurance (as

rating c*asses3 suc( as )re+erred rates/ standard rates and a*so rated

)o*icies3 w(ic( #eans t(at 2ou are c(arged e7tra ecause o+ (ea*t( or w(at

#a2 e considered dangerous acti,ities. In t(e *ast +ew 2ears ,er2 (ea*t(2

indi,idua*s #a2 1ua*i+2 +or newer discounted rate *e,e*s suc( as )re+erred

)*us3 or su)er )re+erred3. T(ese are strict *e,e*s w(ere 2ou (a,e to 1ua*i+2

2 e7ce**ent #edica* test resu*ts/ certain (eig(t and weig(t ratios/ no (istor2

o+ #edica* di++icu*ties and wit( a +a#i*2 (istor2 o+ *onge,it2. Cigarette

s#o%ers get c(arged +or a s#o%er *i+e insurance )o*ic2 w(ic( is #ore

e7)ensi,e.

METHOD OF UNDERWRITING:METHOD OF UNDERWRITING:

S)ecia* Treat#ent to Ladies and Minor Li,es

Ro*e o+ Insurance Inter#ediaries in Underwriting

udg#enta* Met(od

Nu#erica* Rating Met(od




Re*ati,e Merits & De#erits

Met(ods o+ rating nonBstandard *i,es in Underwriting

T(ere is ,arious #et(od o+ underwriting. Underwriter uses t(eT(ere is ,arious #et(od o+ underwriting. Underwriter uses t(e

+o**owing #et(od to underwrite t(e a))*ications. T(e2 are as +o**ow as+o**owing #et(od to underwrite t(e a))*ications. T(e2 are as +o**ow as88

NUMERICL RTING METHOD: NUMERICL RTING METHOD:

Nu#erica* rating #et(od #eans t(e identi+ication o+ i#)air#ent/ Nu#erica* rating #et(od #eans t(e identi+ication o+ i#)air#ent/

assess#ent o+ t(e ,a*ue o+ eac( i#)air#ent and t(en trans*ates t(e ,a*ueassess#ent o+ t(e ,a*ue o+ eac( i#)air#ent and t(en trans*ates t(e ,a*ue

into nu#era* to +aci*itate t(e uni+or#it2 o+ underwriting decisions. A suinto nu#era* to +aci*itate t(e uni+or#it2 o+ underwriting decisions. A su

standard *i+e is regarded as on w(ic( re)resents s)ecia* (a@ard in res)ect o+ standard *i+e is regarded as on w(ic( re)resents s)ecia* (a@ard in res)ect o+

one or #ore +actors o+ insurai*it2. T(e2 are as +o**ow.one or #ore +actors o+ insurai*it2. T(e2 are as +o**ow.

<.<. 6a#i*2 !istor26a#i*2 !istor2

:.:. Persona* !istor2.Persona* !istor2.

?.?. ui*d.ui*d.

>.>. Present state o+ (ea*t( and (aits.Present state o+ (ea*t( and (aits.

F.F. Occu)ation and residence.Occu)ation and residence.

.. Race.Race.

In addition to t(e ao,e t(e )*an and a#ount o+ assurance (a,e anIn addition to t(e ao,e t(e )*an and a#ount o+ assurance (a,e an

i#)ortant earing on t(e ,a*ue o+ t(e ris%. T(e 1uestion o+ #ora* (a@ard (asi#)ortant earing on t(e ,a*ue o+ t(e ris%. T(e 1uestion o+ #ora* (a@ard (as

a*so to e gi,en due weig(t.a*so to e gi,en due weig(t.




T(e )rocess o+ nu#erica* rating assess#ent is as +o**owsT(e )rocess o+ nu#erica* rating assess#ent is as +o**ows88

<0<0 Under t(is )rocess/ t(e ,a*ue o+ an2 s)ecia* (a@ard in res)ect o+ eac(Under t(is )rocess/ t(e ,a*ue o+ an2 s)ecia* (a@ard in res)ect o+ eac(

o+ t(e ao,e +actors is #easured in ter#s o+ a))ro)riate e7tra #ora*it2 rating.o+ t(e ao,e +actors is #easured in ter#s o+ a))ro)riate e7tra #ora*it2 rating.

6or t(is )ur)ose/ )oint s(ou*d e otained +ro# t(e sc(edu*es w(ic( s(ow t(e6or t(is )ur)ose/ )oint s(ou*d e otained +ro# t(e sc(edu*es w(ic( s(ow t(e

nu#er o+ )oints w(ic( #ust e added +or eac( ad,erse +eature and t(enu#er o+ )oints w(ic( #ust e added +or eac( ad,erse +eature and t(e

nu#er o+ )oints w(ic( #ust e sutracted +or eac( +a,ora*e +eature.nu#er o+ )oints w(ic( #ust e sutracted +or eac( +a,ora*e +eature.

:0:0 T(e ne7t stage in t(e nu#erica* rating is to trans*ate t(e e7tra #orta*it2T(e ne7t stage in t(e nu#erica* rating is to trans*ate t(e e7tra #orta*it2

into e7tra )re#iu# necessar2 to co#)ensate t(ereo+. 6or t(is )ur)oseinto e7tra )re#iu# necessar2 to co#)ensate t(ereo+. 6or t(is )ur)ose

regu*ar*2 sca*ed e7tra #orta*it2. 6or e7a#)*e/ C*ass I rating co,ers e7traregu*ar*2 sca*ed e7tra #orta*it2. 6or e7a#)*e/ C*ass I rating co,ers e7tra

#orta*it2 o+ :;B?;H/ C*ass II >;B;H/ C*ass III FBFH/ C*ass IJ K;B<:;H#orta*it2 o+ :;B?;H/ C*ass II >;B;H/ C*ass III FBFH/ C*ass IJ K;B<:;H

and so on.and so on.

?0?0 Ta*es9 o+ e7tra )re#iu# re1uired +or eac( e7tra #orta*it2 c*ass under Ta*es9 o+ e7tra )re#iu# re1uired +or eac( e7tra #orta*it2 c*ass under

eac( )*an o+ assurance is t(en )re)ared. W(en t(e tota* e7tra #orta*it2 +or aeac( )*an o+ assurance is t(en )re)ared. W(en t(e tota* e7tra #orta*it2 +or a

ris% is arri,ed at/ co#)an2 deter#ine wit(in w(ic( standard c*ass it +a** andris% is arri,ed at/ co#)an2 deter#ine wit(in w(ic( standard c*ass it +a** and




t(en t(e e7tra )re#iu# is otained 2 re+erence to t(e ta*es. T(e e7trat(en t(e e7tra )re#iu# is otained 2 re+erence to t(e ta*es. T(e e7tra

#orta*it2 +a**ing e*ow C*ass I a# ignored.#orta*it2 +a**ing e*ow C*ass I a# ignored.

D$NTGE OF NUMERICL RTING METHOD:D$NTGE OF NUMERICL RTING METHOD:

<0<0 T(e #ain ad,antage o+ nu#erica* rating #et(od is t(atT(e #ain ad,antage o+ nu#erica* rating #et(od is t(at t(e ,a*ue o+ an2t(e ,a*ue o+ an2

s)ecia* (a@ard as i**ustrate ao,e is #easured in ter#s o+ e7tra #orta*it2s)ecia* (a@ard as i**ustrate ao,e is #easured in ter#s o+ e7tra #orta*it2

rating.rating.

:0:0 T(e e7tra #orta*it2 ratings +or ,arious +actors are t(enT(e e7tra #orta*it2 ratings +or ,arious +actors are t(en aggregated toaggregated to

arri,e at t(e ,a*ue o+ t(e ris% o+ #orta*it2.arri,e at t(e ,a*ue o+ t(e ris% o+ #orta*it2.

?0?0 T(e ne7t stage is to trans*ate t(e e7tra #orta*it2 into an e7tra )re#iu#T(e ne7t stage is to trans*ate t(e e7tra #orta*it2 into an e7tra )re#iu#

necessar2 to co#)ensate t(e e7tra ris% o+ #orta*it2.necessar2 to co#)ensate t(e e7tra ris% o+ #orta*it2.

COMPONENT# OF LIFE IN#URNCE PRICING:

As we (a,e seen/ t(e )ur)ose o+ underwriting in Li+e Insurance is to

see t(at on*2 t(ose *i,es/ w(ic( (a,e a*#ost si#i*ar e7)osure to t(e ris% o+




deat(/ enter t(e )oo* o+ Li+e Insurance and to c(arge e,er2one wit( a

)re#iu# co##ensurate wit( t(e ris% t(at (e s(e rings in to t(e )oo*.

W(i*e t(ere are e*aorate wa2s to c(ec% t(e )(2sica* condition o+

(ea*t( o+ a )erson/ it is e7tre#e*2 di++icu*t to ,eri+2 t(e intention o+ a )erson

w(o )ro)oses a *i+e +or insurance )rotection. One ste) in t(is direction is to

ensure t(at t(e a#ount o+ insurance co,er t(at is )ro,ided to t(e )erson is in

*ine wit( (is inco#e)re#iu# )a2ing ca)acit2 +inancia* *oss t(at t(e

ene+iciaries o+ insurance wou*d su++er in case o+ t(e deat( o+ t(e *i+e insured.

T(is )rocess o+ c(ec%ing w(et(er t(e insurance co,er soug(t +or is wit(in a

*i#it in re*ation to t(e inco#e o+ t(e *i+e to e assured is ca**ed +inancia*

underwriting.

FCTOR# RE CON#IDERED ININDI$IDUL LIFE

IN#URNCE UNDERWRITING:

Li+e insurance co#)anies eac( (as t(eir own e7tensi,e )o*ic2

and )rocedure #anua*s t(e2 are su))osed to +o**ow in deter#ining w(et(er

or not to issue an Indi,idua* Li+e insurance )o*ic2/ and in )ricing t(at )o*ic2.

T(e insurer4s underwriters t2)ica**2 use a co#ination o+ +actors t(at

e7)erience s(ows e1uates wit( t(e ris% o+ deat( -and )re#ature deat(0.

T(e2 inc*ude t(e a))*icant4s answers to a series o+ 1uestions suc( as8




<. Age/

:. Se7 -e7ce)t in se,era* states t(at re1uire uniBse7 rates/ e,en

t(oug( actuaria* data s(ows wo#en *i,e *onger t(an #en0

?. !eig(t and weig(t.

>. !ea*t( (istor2 -and o+ten +a#i*2 (ea*t( (istor2 BB )arents and si*ings0/

F. T(e )ur)ose o+ t(e insurance -suc( as +or estate )*anning/ or usiness or

+or +a#i*2 )rotection0.

. T(e a#ount o+ insurance t(e a))*icant a*read2 (as/ and an2 additiona*

insurance s(e )ro)oses to u2 as )eo)*e wit( +ar #ore *i+e insurance t(an

t(e2 need tend to e )oor insurance ris%s0

. Marita* status and nu#er o+ c(i*dren/

. Occu)ation -so#e are (a@ardous/ and increase t(e ris% o+ deat(0/

K. Inco#e -to (e*) deter#ine suitai*it20/

<;. S#o%ing or toacco use -t(is is an i#)ortant +actor/ as s#o%ers

(a,e s(orter *i,es0 /

<<. A*co(o* -e7cessi,e drin%ing serious*2 (urts *i+e e7)ectanc20/

<:. Certain (oies -suc( as race car dri,ing/ (angBg*iding/ )i*oting nonB

co##ercia* aircra+t0/

<?. 6oreign tra,e* -certain +oreign tra,e* is ris%20.




OUT#OURCING OF UNDERWRITING CTI$ITIE# IN

IN#URNCE D$TGEND DI#D$NTGE#:

De*(iBased ount2 Li+e Insurance Co#)an2 -ount20 (as ranc(es

a** o,er India and it +o**ows an aggressi,e #ar%eting strateg2 in order to

otain #ore custo#ers. Soon a+ter t(e *iera*i@ation o+ t(e insurance sector/

ount2 started se**ing its )roducts aggressi,e*2.

Initia**2/ it #ade )ro+its. In +act/ t(e nu#er o+ its custo#ers e7ceeded

t(e #anage#ent4s e7)ectations. T(e )o)u*arit2 o+ t(e co#)an2 a*so

increased. In addition/ t(ere was a stead2 increase in t(e nu#er o+

custo#ers. T(e reason was t(at ount2 o++ered inno,ati,e )roducts t(at

suited t(e ,aried re1uire#ents o+ )eo)*e. T(e co#)an2 ado)ted t(e

#ar%eting strateg2 o+ o++ering custo#i@ed )roducts. T(us/ it eca#e one o+

t(e *eading insurance co#)anies/ o++ering #a7i#u# nu#er o+ )roduct

,ariants in t(e industr2.

O,er a )eriod o+ ti#e/ t(ere was a gradua* increase in t(e nu#er o+

)*a2ers in t(e industr2. Conse1uent*2/ co#)etition in t(e industr2 intensi+ied.

A** insurance co#)anies in t(e #ar%et were strugg*ing to #aintain and

increase t(eir #ar%et s(are. Des)ite t(e intense co#)etition t(at )re,ai*ed in

t(e industr2/ ount2 Li+e Insurance Co#)an2 #anaged to increase its #ar%et

s(are. Its )er+or#ance in t(e co#)etiti,e scenario was +air*2 good.




!owe,er/ during t(e *ast +ew #ont(s/ its )ro+its (a,e decreased

s(ar)*2. T(e co#)an2 (as een +acing di++icu*ties re*ated to ad#inistration

and interde)art#enta* coordination.


UNDERWRITING IN FIRE IN#URNCE

Inside story8

•• De+inition o+ +ire insuranceDe+inition o+ +ire insurance

•• Need +or +ire insurance Need +or +ire insurance

• Standard +ire & s)ecia* )eri*s )o*icies

• 6ire s)ecia* )o*icies in t(e underwriting

• Underwriting9 ac1uire/ e,a*uate/ act/ #onitor

• 5e2 underwriting c*ues +or *oss and )re,ention

27

http://images.google.co.in/imgres?imgurl=http://ifnews.if.fi/midcom-serveattachmentguid-3da95f34417fd73f16fe3e8c03f96b6a/hanjinpensylvfire.jpg&imgrefurl=http://ifnews.if.fi/en/latest-topics/marine-newsletter/international-union-of-marine-insurance--annual-conference-2006.html&usg=__A6iA_O6OY6my6g9BsHTJh8EQyxc=&h=309&w=200&sz=14&hl=en&start=3&tbnid=GdsLhEZP_BWpBM:&tbnh=117&tbnw=76&prev=/images?q=marine+insurance&gbv=2&hl=en



DEFINITION OF FIRE IN#URNCE:

section : o+ Indi,n Ins+r,n-e -t! )516 de+ines 6ire insurance usiness

as t(e usiness o+ e++ecting ot(erwise t(an incidenta* to so#e ot(er c*ass o+

usiness/ contract o+ insurance against *oss 2 or incidenta* to +ire or ot(er

occurrence custo#ari*2 inc*uded a#ong t(e ris%s insured against in +ire

insurance )o*ic2.

NEED FOR FIRE IN#URNCE:NEED FOR FIRE IN#URNCE:

Fire Under7ritin89 descrie t(e tec(nica* as)ects o+ conducting t(e

usiness o+ insurance o+ +ire ris% as o))osed to t(e ad#inistrati,e/ +inancia*

and organi@ationa* as)ects o+ t(e usiness. In #ost cases/ +ire ris%s *ead

t(e#se*,es to t(e )retension o+ intentiona* *osses and +raudu*ent c*ai#s. In

t(e +ire insurance )o*icies/ tota* *oses in,o*,ing )a2#ent o+ t(e +u** su#

insured is in+re1uent and )artia* *osses are to e #et +re1uent*2. T(e )ure ris%

)re#iu# in +ire insurance #ust )ro,ide +or ot( tota* *osses and )artia*

*osses.

A +ire underwriter is =udged 2 (is ai*it2 to a,oid wide +*uctuation in

t(e *oss ratio and t(e )ro+it ratio. T(e grater t(e stai*it2 (e can i#)art to




t(ese two +igures t(e #ore (e is acc*ai#ed. A +ire underwriter #ust used

wea)on o+ di++erentia* *i#its to t(e ut#ost.

TT(e need +or +ire insurance arises as t(e #ateria* )ro)ert2 is

susce)ti*e to da#age or destruction 2 +ire or ot(er )eri*s and t(e #ateria*

)ro)ert2 (as so#e #easura*e #onetar2 ,a*ue. A*so/ t(e occurrence o+ a +ire

ends to ot(er conse1uentia* *osses suc( as *oss o+ )roduction causing *oss o+

)ro+its.

6ire Insurance is t(e o*dest +or# o+ insurance and it co,ers erected +i7ed

assets and #o,a*e assets w(i*st *2ing in a )articu*ar *ocation and dec*ared

according*2 +*oor insurance. T(e )o*ic2 o+ +ire co,ers ui*ding/ e*ectrica*

insta**ation in ui*dings/ contents o+ ui*dings suc( as )*ant and e1ui)#ents/

#ac(iner2/ +urniture/ +i7tures and +ittings/ )i)e*ine *ocated inside or outside

t(e )re#ises.

T(e )o*ic2 o+ +ire co,ered t(e ris%s o+ +ire and *ig(tning/ e7)*osion/

riot/ stri%es/ terroris#/ )eri* +ro# water da#age *i%e +*ood/ stor#/ natura*

ca*a#ities *i%e eart(1ua%e/ *ands*ide/ etc. due to ad,ance#ents in tec(no*og2/

+ire )o*icies toda2 a*so co,ers t(e accidenta* *ea%age and conta#ination/

s)rin%*er *ea%ages/ etc. as a** t(e ao,e )eri*s cause #ateria* da#age/ a** o+

t(e# are inc*uded in t(e insurance.




#TNDRD FIRE #PECIL PERIL(# POLICIE#:

EEar*ier t(e +ire )o*icies used to co,er on*2 +ire )eri*s/ u) to t(e interest

o+ insured to decide w(at e7tensions (e re1uires to asic )o*ic2. A retention

t(at was carried out in <K/ 2 w(ic( a sing*e +ire )o*ic2 was roug(t out

co,ering a set o+ )eri*s wit(in t(e standard )o*ic2. So t(e )o*ic2 (as started

co,ering +ire/ e7)*osion i#)*osion/ aircra+t i#)act da#age/ and Riot and

Stri%e Ma*icious Da#age -RSMD0 at t(e asic rate. Later RSMD was

e7tended to co,er terroris# a*so.

T;e -4,sses o. st,nd,rd .ire 0o4i-y ,re:T;e -4,sses o. st,nd,rd .ire 0o4i-y ,re:

C4,+se ,8 Na#e o+ t(e )arties to contract

C4,+se 38 Pa2#ent o+ )re#iu# 2 t(e insured

C4,+se -8 Conditions and e7c*usions to t(e asic )o*ic2

C4,+se d8 Peri*s co,ered under t(e )o*ic2




T2)e o+ )a2#ent #ade 2 t(e co#)an2/ actua* ,a*ue/ or reinstate ,a*ue/ or its

ot(er o)erations.

Fire:Fire:

6ire #eans actua* ignition or urning/ under accidenta* circu#stances.

T(e )o*ic2 dose not intended to co,er in(erent ,ices o+ co##odit2 *i%e its

own +er#entation or natura* (eating da#age to t(e )ro)ert2 w(en undergoing

(eating or d2eing )rocess are not co,ered. T(e urning o+ a )u*ic )ro)ert2 is

not co,ered. S)ontaneous co#ustion can e co,ered wit( an e7tra )re#iu#.

Li8;tnin8:Li8;tnin8:

An2 da#ages caused 2 *ig(tning wit( or wit(out actua* ignition are

co,ered in t(e standard +ire )o*ic2.

ir-r,.t d,<,8e:ir-r,.t d,<,8e:

Losses and destruction caused 2 aircra+t and ot(er aeria* de,ices and

artic*es dro))ed/ e7c*uding t(ose caused 2 )ressure wa,es are co,ered under

aircra+t da#age.

Riot #tri=e M,4i-io+s ,nd Terroris< D,<,8e >R#MTD*:Riot #tri=e M,4i-io+s ,nd Terroris< D,<,8e >R#MTD*:




T(e *oss or ,isi*e )(2sica* destruction carried out 2 t(e e7terna*

,io*ent/ t(is e7c*udes certain )eri*s *i%e tota* or )artia* cessation o+ wor%/

)er#anent or te#)orar2 dis)ossession o+ an2 ui*ding or )*ant/ urg*ar2/

(ouserea%ing/ t(e t(e+t. Terroris# is genera**2 used as #eans o+ ,io*ence

+or )o*itica* ends or to cause +ear in t(e )u*ic.

-t o. God >OG* Peri4s:-t o. God >OG* Peri4s:

Loss/ destruction or da#age caused 2 t(e at#os)(eric )eri*s caused

2 nature *i%e stor#/ c2c*one/ te#)est/ t2)(oon/ (urricane/ tornado/ +*ood or

inundation are co,ered in t(e standard +ire )o*ic2 e7c*uding t(ose resu*ting

+ro# eart(1ua%e/ or ,o*canic e7)*osion.

Forest Fire:Forest Fire:

T(e standard +ire )o*ic2 is e7tended to inc*ude t(e da#age to t(e

)ro)ert2 insured caused 2 urning/ w(et(er accidenta* or ot(erwise/ o+

+orest/ and t(e c*earing o+ *ands 2 +ire. T(e rate o+ interest is FH.

E,rt;?+,=e:E,rt;?+,=e:

T(is co,er is e7tended w(en t(e eart(1ua%e is caused 2 *andside/

+*ood/ and o,er+*ow o+ sea/ *a%es/ reser,oirs or ri,ers.




#0ont,neo+s Co<3+stion#0ont,neo+s Co<3+stion

So#e #ateria* *i%e coa*/ (a2 and iogases are susce)ti*e to

s)ontaneous co#ustion/ +er#entation or (eating. T(e co,er is +or *oss or

da#age 2 +ire on*2. 6or rating/ ,arious co##odities are c*assi+ied into +our

categories de)ending on t(eir susce)tii*it2 t s)ontaneous co#ustion. T(e

rates a))*ied are8

C,te8ory I B ;.:FH

C,te8ory II ' ;.FH

C,te8ory III ' FH

C,te8ory I$B <.;;H

FIRE #PECIL POLICIE# IN THE UNDERWRITING:

TT(e standard +ire )o*ic2 is #odi+ied 2 attac(#ent o+ a))ro)riate

c*ause in order to #eet t(e ,ar2ing re1uire#ents o+ di++erent c*ients.




F4o,ter Po4i-y:F4o,ter Po4i-y:

T(is is issued to co,er stoc% situated in #ore t(an one s)eci+ied

ui*ding situated

<. Wit(in t(e *i#its o+ one cit2 town ,i**age/

:. More t(an one cit2 town ut u) to F; *ocations/

?. 6or #ore t(an F; *ocation in ,arious cities towns ,i**age.

T(ese are not issued +or i##o,a*e )ro)ert2 and to trans)ort

contractors and C*earing & 6orwarding agents. T(e #a7i#u# su# insured at

an2 one *ocation s(ou*d not e #ore t(an <;H o+ t(e tota* su# insured. At a**

ti#es during t(e currenc2 o+ )o*ic2/ t(e insured s(ou*d (a,e a good interna*

audit and accounting )rocedure.

De-4,r,tion Po4i-y:De-4,r,tion Po4i-y:

T(is is issued to co,er stoc%/ w(ic( are su=ect to #ar%ed +*uctuations

in 1ua*it2. T(e )re#iu# c(arges at t(e issue o+ t(e )o*ic2 are )ro,isiona* and

are ca*cu*ated ased on t(e su# insured. T(e )o*ic2/ tota* o+ ,a*ues o+ goods

at agreed inter,a*s and on t(e e7)ir2 o+ t(e )o*ic2/ tota* o+ t(e ,a*ues dec*ared




is di,ided 2 t(e nu#er o+ dec*aration are arri,e at a,erage su# insured on

w(ic( )re#iu# is again ca*cu*ated and an ad=udicated and an ad=ust#ent is

#ade/ su=ect to retention o+ ?FH o+ t(e )ro,isiona* )re#iu# 2 t(e insurer.

Lo-,4 +t;orities C4,+se:Lo-,4 +t;orities C4,+se:

T(is c*ause inc*udes an additiona* cost o+ reinstate#ent o+ t(e

destro2ed or da#aged )ro)ert2 under an2 Act o+ Par*ia#ent or wit( 2*aws

o+ an2 #unici)a* or *oca* aut(orit2.

Es-,4,tion C4,+se:Es-,4,tion C4,+se:

T(e tari++ )ro,ides t(at t(e insurers s(ou*d a**ow auto#atic regu*ar

increase in t(e su# insured t(roug(out t(e )eriod o+ t(e )o*ic2 in return +or

an additiona* )re#iu# to e in ad,ance.

Loss o. Rent C4,+se:Loss o. Rent C4,+se:

T(e )o*ic2 co,ers t(e *oss o+ rent t(at an owner su++ers on account o+

t(e )re#ises eco#ing untena*e +o**owed 2 an insured )eri*s. !ere/ it is




essentia* t(at t(e insured and t(e insurer are c*ear aout granting t(e co,er 2

c(ec%ing t(e contract etween t(e owner and t(e tenant o+ )re#ises.

8reed B,n= C4,+se:8reed B,n= C4,+se:

A** )o*icies in w(ic( a an% (as a )artia* interest are to e #ade out in

t(e na#e o+ t(e an% and owner or #ortgagor. T(e Agreed an% C*ause is

incor)orated to )rotect t(eir insura*e interest as #ortgagors.

Re<o@,4 o. De3ris C4,+se:Re<o@,4 o. De3ris C4,+se:

T(e e7)enses incurred +or c*earing o+ t(e deris accu#u*ated ecause

o+ a +ire )eri* are a*so co,ered. I+ t(e2 e7ceed one )ercent o+ t(e c*ai#

a#ount/ a se)arated su# insured (as to e dec*ared +or t(is co,er and t(e

)re#iu# is co**ected on t(e su# insured. One )ercent o+ t(e c*ai# a#ount is

auto#atica**2 co,ered under t(e asic )o*ic2.

UNDERWRITINGA C"UIRE! E$LUTE! CT MONITOR:




!!ow eac( indi,idua* underwriter )er+or#s (is(er i#)ortant tas% sets

u) t(eir co#)an2 to o)erate )ro+ita*2 or su++er +ro# tre#endous e7)osure

& +inancia* *osses.

T(e )ressures o+ a co#)etiti,e usiness en,iron#ent/ wor%*oad/ cost

cutting/ *ess t(an in+or#ati,e sources o+ ris% in+or#ation and so#eti#es

e,en s*o))2 wor%#ans(i) and )oor =udg#ent a**ow too #an2 tota**2

unacce)ta*e ris%s to s*i) 2 )ro)ert2 underwriters and gain insurance

co,erage e,er2 da2. T(is +act (as serious conse1uences +or ot( )ro)ert2

carriers and +or societ2.

W(i*e eac( insurance a))*ication on t(e underwriter4s des% is/ in

so#e wa2s uni1ue/ #ost a))*ications can e grou)ed into road categories

ena*ing t(e underwriter to a))*2 in+or#ation +ro# standardi@ed rating

indices and industr2 dataases.

In #an2 cases resu*ting in *osses to )ro)ert2 carriers/ c*ear warning

signs were )resent t(at were eit(er ignored or #issed 2 t(e underwriter

w(o )*aced t(e usiness. T(ese warning signs range +ro# +inancia*

instai*it2/ a serious cri#ina* ac%ground and 1uestiona*e )rior *osses to

w(o*esa*e disregard o+ reasona*e securit2 and +ire )re,ention #easures.

%EY UNDERWRITING CLUE# FOR LO## PRE$ENTION:




TT(e +o**owing +actors s(ou*d e considered eac( ti#e t(at a +ire

insurance a))*icant or )o*ic2 renewa* is eing considered. Re*ations(i) o+

trust wit( t(e )roducer BP*acing insurance on ris%s co#ines t(e science o+

rating e7)osures wit( t(e art o+ de,e*o)ing a ,a*id gut +ee*ing aout

indi,idua*s see%ing +ire insurance co,erage. T(e )ro+essiona* =udg#ent and

street s#arts o+ t(e agentro%er is an i#)ortant *in% in t(is )rocess. As%

2ourse*+/ (as t(ere een a (istor2 o+ 1uestiona*e *osses +ro# c*ients

re+erred 2 t(is agentro%er t(at #a%es 2ou 1uestion t(eir s%i**/ (onest2 or

co##on sense.

Loss ;istoryLoss ;istory::

Underwriter need to %now aout eac( )ersona* *ines and co##ercia*

+ire insurance a))*icant4s )ast (istor2 o+ c*ai#s acti,it2 t(at #a2 or #a2 not

(a,e een sett*ed. Toda2/ t(ere are underwriting dataases t(at can )ro,ide

t(is in+or#ation in seconds and at reasona*e cost. In+or#ation on t(ese

dataases a*ong wit( contact in+or#ation is contained in t(is docu#ent.


http://images.google.co.in/imgres?imgurl=http://www.zagross.net/images/Marine_Insurance1.jpg&imgrefurl=http://www.zagross.net/marine_insurance.htm&usg=__fAeqDLBYN0ziVC71kbtJdHm3cSo=&h=210&w=320&sz=14&hl=en&start=5&tbnid=Spbb3L8EvBSTWM:&tbnh=77&tbnw=118&prev=/images?q=marine+insurance&gbv=2&hl=en



Fin,n-i,4 -onditionFin,n-i,4 -ondition::

Is t(is usiness or indi,idua* +inancia**2 stra))ed or not. Is t(ere an

i#)ending situation/ un%nown to 2ou/ t(reatening to dri,e down t(e usiness

or )ersona* +inances o+ t(e a))*icant or not. An ine7)ensi,e & onB*ine

Ye,r in 3+sinessYe,r in 3+siness::

Underca)ita*i@ed startBu) usinesses wit( ine7)erienced

owner#anagers/ es)ecia**2 t(ose entering (2)erBco#)etiti,e #ar%ets *i%e

s#a** arBrestaurants or )i@@a stores/ are notorious*2 )rone to +ai*ure.

Esta*is(ed usinesses wit( sound )roducts and a so*id custo#er ase are

o,ious*2 *ess ris%2.

Loss Contro4 Re0ortEn8ineerin8 Re0ortLoss Contro4 Re0ortEn8ineerin8 Re0ort::

A 1ua*i+ied *oss )re,ention ins)ector can o+ten s)ot signi+icant

)ro*e#s a++ecting t(e current and +uture ,a*ue o+ a )ro)ert2. Structura* or

uti*it2 de+ects a++ecting t(e suitai*it2 o+ a ris% +or its intended )ur)ose or

e,en intangi*es suc( as ua*it2 o+ Manage#ent issues can (a,e a

)ro+ound i#)act on o)erations/ )ro+itai*it2 and ris% o+ +ire.




"+,4ity o. M,n,8e<ent"+,4ity o. M,n,8e<ent::

A 6ord 6oundation stud2 on Arson 2ears ago +ound t(at t(e nu#er o+

sanitar2 code ,io*ations was t(e #ost signi+icant corre*ation to w(et(er a

gi,en ui*ding wou*d sustain an arson +ire. ua*it2 o+ Manage#ent is

e7)ressed in c*ean & secure o)erations/ a (ig( *e,e* o+ #aintenance/ and

ot(er )ositi,e +actors t(at/ 2 t(e#se*,es/ tend to su))ress t(e )ossii*it2 o+

+ire and cri#e.




UNDERWRITING O6 MOTOR INSURANCE8


UNDERWRITING OF MOTOR IN#URNCE

Inside story8• Needs +or #otor insurance

• T2)es o+ )o*ic2 +or#s

• 6actor in #otor insurance

• C*ai#s #anage#ent

• onus #au*s c*ause

41



UUnderwriting re+ers to assessing a ris% )resented +or insurance and

deciding w(et(er it is acce)ta*e or not. I+ acce)ta*e/ t(e underwriter decides

t(e ter#s and )re#iu# at w(ic( t(e insurance can e #ade. T(e #otor

Insurance re1uires t(e )ro)oser to co#)*ete a )ro)osa* +ro# t(at re,ersa*/ 2

t(e answers to t(e 1uestions t(e #ateria* +acts t(at a++ected t(e ris%. T(e +acts

t(e underwriter wis(es to %now are t(ose t(at re+ers to )ro)oser and t(ose/

w(ic( re+ers to t(e ,e(ic*e and t(e ris% to e insured.

Usua**2 t(e insurers %ee) trac% o+ t(e )ro)oser na#e/ address and

usiness/ *oss (istor2/ con,ictions -re*ating to dri,ing o++ences/ owners(i)/

usages and ,io*ence dis(onest20. P(2sica* (a@ard -an2 (a@ard arising +ro#

t(e #ateria*/ structura* or o)erationa* +eatures o+ ris% itse*+ a)art +ro# t(e

)erson owing or #anaging it0 is a*so considered assu#ing t(at t(e )ro)oser

as an indi,idua* or usiness is acce)ta*e to t(e usiness. P(2sica* (a@ard

)ri#ari*2 re*ates to

<. T(e ,e(ic*es to e insured

:. T(e wa2 t(e ,e(ic*es are used/ and

?. T(e )erson w(o are going to dri,e or use t(e#.

T(ere+ore +u** detai*s o+ t(e ,e(ic*e/ its use and t(e deri,es are re1uired.




NEED FOR MOTOR IN#URNCE:

JJe(ic*e #a2 e 2our *ong c(eris(ed 4Pa*ace on w(ee*s4 or one t(at can

are*2 e ca**ed a +ourBw(ee*er ut t(e ,er2 +act t(at it (as to )*2 on roug(

and toug( Indian roads/ s(ou*d e reason enoug( to insure it.

Consider w(at 2our ,e(ic*e (as to endure B )ot(o*es/ o)en #an(o*es/

)udd*es/ interred roads/ our tra++ic #anage#ent s2ste#/ )oor )edestrian

#anage#ent/ asence o+ +oot)at(s +or )edestrians/ =a2wa*%ers and an

increasing nu#er o+ accidents are +ew o+ t(e star% rea*ities.

Foot0,t;s:Foot0,t;s:

As +oot)at(s are encroac(ed 2 (aw%ers/ )edestrians (a,e a toug( ti#e

dodging etween ,e(ic*es to reac( t(e ot(er end o+ t(e road. Large )ot(o*es

and #an(o*es are a co##on sig(t and during t(e #onsoon t(e situation can

get on*2 worse causing unto*d da#age to 2our ,e(ic*e.




Dr+n=en dri@in8:Dr+n=en dri@in8:

Drun%en dri,ing is anot(er ,er2 co##on +eature. e it a car/ a twoB

w(ee*er/ or e,en a truc%/ drun%en dri,ing is one o+ t(e #a=or reasons +or

increase in accidents. T(oug( drun%en dri,ing is a )unis(a*e o++ence t(e

)ena*t2 (as (ard*2 )ro,ed to e a deterrent.

Re-=4ess Dri@in8:Re-=4ess Dri@in8:

esides/ ras( dri,ing 2 2oungsters is anot(er o+ t(e dangerous

rea*ities t(at s(ou*d consider. Ma=orit2 o+ t(e 2oungsters dri,e rec%*ess*2

caring *itt*e +or t(e *aw/ causing serious accidents resu*ting in *oss o+ *i+e or

*i#.

T;e.t:T;e.t:

Cases o+ sto*en cars are on t(e rise. E7)erts in stea*ing cars are we**

aware o+ t(e *oo)(o*es t(at can e e7)*oited and according*2 (a,e a*so een

success+u* in #ani)u*ating wit( t(e c(assis nu#er o+ ,e(ic*es in order t(at

t(e2 are not traced.

Fire:Fire:

Ot(er t(an t(ese t(ere is a*so a danger o+ +ire or t(e+t o+ 2our ,e(ic*e.

Je(ic*e insurance under suc( unsa+e conditions is a #ust not on*2 to

co,er ris%s towards 2ourse*+ and 2our own ,e(ic*e ut a*so to co,er t(e






For< B/ or w(at is co##on*2 %nown as Co<0re;ensi@e Po4i-y/ is an

o)tiona* co,er w(ic( ta%es care o+ t(e +o**owing additiona* *osses and

*iai*ities

<. Loss or da#age to t(e ,e(ic*e and its accessories and e7tra +ittings/

)rotection and re#o,a* costs/ and towing disa*ed ,e(ic*es -on*2 +or

co##ercia* ,e(ic*es0

:. Liai*it2 towards T(ird Part2 Pro)ert2 Da#age/ in e7cess o+ Rs.;;;B

?. Liai*it2 towards e#)*o2ees under Co##on Law and 6ata* Accidents Act/

o,er and ao,e t(e *iai*it2 under Wor%#en4s Co#)ensation Act

>. Persona* Accident ene+its +or t(e owner/ )assengers and e#)*o2ees.

T(e ao,e *osses or *iai*ities can e se)arate*2 co,ered in con=unction

wit( t(e *iai*ities co,ered under t(e Act Po*ic2/ 2 ta%ing a Co#)re(ensi,e

Po*ic2/ )a2ing additiona* )re#iu#.

FCTOR IN MOTOR IN#URNCE:

TT(e Underwriting Po*ic2 in Motor Insurance can e Identi+2ing 2

Jarious 6actors Li%e8

<. T(e t2)e o+ ,e(ic*e

:. Pur)ose +or w(ic( t(e ,e(ic*e is used

?. T(e geogra)(ica* area o+ use




>. T(e )re,ious c*ai#s e7)erience

THE TYPE OF $EHICLE:THE TYPE OF $EHICLE:

6or t(e ,e(ic*e/ t(e insurer considers its #a%e/ #ode*/ registration

#ar%/ t2)e o+ od2/ engine ca)acit2/ )*ated weig(t/ seating ca)acit2/

#odi+ications to #anu+actures s)eci+ication and t(e ,a*ue.


http://images.google.co.in/imgres?imgurl=http://i44.tinypic.com/j6q5qf.jpg&imgrefurl=http://www.rambhai.com/tag/maruti%2Britz%2Bindia&usg=__lrj4LMYPrtvGY9raTN4syZhF8DY=&h=318&w=480&sz=22&hl=en&start=1&itbs=1&tbnid=fShV28k8OefZKM:&tbnh=85&tbnw=129&prev=/images%3Fq%3Dmaruti%2Bcars%2Bphotos%26hl%3Den%26gbv%3D2%26tbs%3Disch:1

http://images.google.co.in/imgres?imgurl=http://www.cubiccapacity.com/wp-content/uploads/2008/08/maruti-suzuki-a-star_1.thumbnail.jpg&imgrefurl=http://www.cubiccapacity.com/maruti-a-star-to-be-out-in-few-weeks/&usg=__4GetjYkS1edDycmGoPgs6XZonMQ=&h=330&w=450&sz=20&hl=en&start=12&itbs=1&tbnid=9ICDd6AY_ZQreM:&tbnh=93&tbnw=127&prev=/images%3Fq%3Dmaruti%2Bcars%2Bphotos%26hl%3Den%26gbv%3D2%26tbs%3Disch:1



In India/ t(e underwriting )rocedure di++ers de)ending on w(et(er t(e

,e(ic*es co#e under t(e categor2 o+ )ri,ate car/ #otorc2c*es or co##ercia*

,e(ic*es as a*so t(e insureds esti#ated ,a*ue/ t(e )urc(ase )rice and t(e 2ear

o+ #anu+acture o+ t(e ,e(ic*e. T(ere is a great dea* o+ underBinsurance in

#otor insurance. T(ere+ore care+u* attention #ust e )aid to t(e insureds

esti#ated ,a*ue in re*ation to t(e age o+ t(e ,e(ic*e/ es)ecia**2 ecause t(ere

is no )ro rata condition o+ a,erage in t(e )o*ic2 and su# insured is t(e *i#it

o+ *iai*it2 )er accident and not +or t(e )eriod o+ t(e insurance.

PURPO#E FOR WHICH THE $EHICLE I# U#ED:PURPO#E FOR WHICH THE $EHICLE I# U#ED:

T(e underwriter ta%es into consideration t(e ris% e7)osure arising

)ur)ose +or w(ic( t(e ,e(ic*e is used. An underwriter wi** en1uire w(et(er

t(e ,e(ic*e is used8

To carr2 t(e o)erators own goods/ or

6or (ire or reward in t(e carriage o+ goods +or goods +or ot(er

usiness/ or

Si#u*taneous*2 +or ot( t(e )ur)oses.

Ris% e7)osure ,aries in re*ation to t(e use t(e ,e(ic*e is )ut to. Pri,ate

cars are *esser e7)osed t(an ta7ies/ as t(e *atter is used e7tensi,e*2 +or




#a7i#u# re,enue. Ta7ies t(ere+ore attract a (ig(er )re#iu# rate. Si#i*ar*2/

goods carr2ing ,e(ic*es/ w(ic( are used as )ri,ate carriers and trans)ort/ on*2

t(eir owners4 goods attract a *ower )re#iu#/ t(an t(ose used as )u*ic

carriers +or trans)orting goods +or (ire.

THE GEOGRPHICL RE OF U#E:THE GEOGRPHICL RE OF U#E:

T(e area o+ o)eration o+ a ,e(ic*e a*so (as a direct earing on t(e

)re#iu# rate. T(is is so ecause/ certain areas o+ o)eration are #ore

congested wit( (ig( densities o+ )o)u*ation and road tra++ic t(an ot(ers and

)ose (ig(er e7)osure to accidents. 6or t(is )ur)ose/ t(e tari++ di++erentiates

two @ones in India/ i.e./ Qone A & Qone / +or )ri,ate cars and ta7ies. Qone A

re)resents t(e Madras region and o#a2 region -e7c*uding o#a2 cit20

and Qone re)resents t(e Ca*cutta region/ De*(i region and o#a2 cit2. In

Qone / t(e densities o+ )o)u*ation and road tra++ic are #ore and (ence

attract a (ig(er )re#iu# rate.

Suc( di++erentia* rating does not a))*2 to co##ercia* ,e(ic*es suc( as

truc%s and uses/ as t(ese ,e(ic*es nor#a**2 tra,e* t(roug(out India +or t(eir

o)eration. !owe,er/ a discount is a**owed on t(e )re#iu# +or co##ercia*

,e(ic*es used as contract carriage/ sc(oo* uses/ )u*ic and )ri,ate uses used

+or carr2ing )assengerswor%ers and o)erate wit(in a radius o+ F; %i*o#eters

+ro# t(e cit2 *i#its.




THE PRE$IOU# CLIM# EPERIENCE:THE PRE$IOU# CLIM# EPERIENCE:

Un+a,ora*e c*ai#s e7)erience is o,ious*2 a ad ris% t(ere o+ it

is res)onsii*it2 o+ an underwriter to identi+2. T(e tari++ (as ado)ted a s2ste#

ca**ed t(e onusMau*s C*ause/ to gi,e discounts +or good c*ai#s e7)erience

and a *oading +or ad e7)erience. T(e c*ai# e7)erience o+ e7)iring 2ear4s

)o*ic2 is t(e asis +or a**owing discount or c(arging a *oading...

CLIM# MNGEMENT:

UUn+a,ora*e c*ai#s e7)erience is o,ious*2 a ad ris% +or an

underwriter. T(e tari++ (as ado)ted a s2ste# ca**ed t(e onusMau*s C*ause/

to gi,e discounts +or good c*ai#s e7)erience and a *oading +or ad

e7)erience. T(e c*ai# e7)erience o+ e7)iring 2ear4s )o*ic2 is t(e asis +or

a**owing discount or c(arging a *oading.

T(e onus Mau*s are a))*ica*e to Own Da#age section o+ t(e

co#)re(ensi,e )o*ic2. In ot(er words/ t(e discount or t(e *oading is a))*ied

on t(e )re#iu# co#)onent o+ t(at section o+ t(e )o*ic2 on*2. It is NOT

a))*ica*e a*so +or Road Transit Po*icies/ Motor Trade Po*icies and )o*icies

w(ic( co,er on*2 6ire and T(e+t ris%s. T(e discount*oading +o**ows t(e

+ortunes o+ t(e origina* insured and not t(e )o*ic2




BONU# MUL# CLU#E:BONU# MUL# CLU#E:

In t(e )re#iu# rating s2ste# )resent*2 eing used/ t(e +actor o+

)ersona* (a@ard o+ t(e dri,er is not ta%en into consideration direct*2. In

#an2 ot(er countries/ it is an integra* +actor to in+*uence t(e )re#iu# rate

and a )ri#e consideration +or acce)tance o+ t(e ris% 2 t(e insurance

co#)an2. !owe,er/ t(e s2ste# o+ onus Mau*s recogni@es t(is +actor

indirect*2 since onus is a reward w(ic( a**ows discounts +or c*ai#B+ree

)eriod/ w(i*e Mau*s is a *oading in t(e )re#iu# +or ad,erse c*ai#s

e7)erience. T(us/ t(e discount acts as an incenti,e to t(e insured to e7ercise

care and caution w(i*e dri,ing. Indirect*2/ t(e discount contriutes to t(e

o=ecti,e o+ road sa+et2.

MOTOR CYCLE #COOTER COMMERCIL $EHICLE# >Ot;er

t;,n T,ies*

Lo,din8 Dis-o+nt

0ositions on O7n

D,<,8e Pre<i+< ,t

e0iry o. t;e 0o4i-y

Lo,din8 Dis-o+nt on O7n D,<,8e Pre<i+<

to 3e ,004ied on rene7,4

I. -4,i< is <,de

d+rin8 e0irin8

Po4i-y Ye,r

I. no -4,i< is <,de

d+rin8 e0irin8

Po4i-y Ye,r




Wit( >;H Loading Continue >;H Loading C(arge ?;H Loading

Wit( ?;H Loading C(arge >;H Loading C(arge :FH Loading

Wit( :FH Loading C(arge ?;H Loading C(arge <FH Loading

Wit( <FH Loading C(arge :FH Loading No Loading Discount

No Loading Discount C(arge <FH Loading A**ow :;H Discount

Wit( :;H Loading No Loading Discount Increase Discount to ?;H

Wit( ?;H Loading Reduce discount to :;H Increase Discount to ?FH

Wit( ?FH Loading Reduce discount to ?;H Increase Discount to >FH

Wit( >FH Loading Reduce discount to ?FH Increase Discount to FFH

Wit( FFH Loading Reduce discount to >FH Continue FFH Discount

Ca*cu*ation o+ t(e )re#iu# is an actuaria* science #ade )ossi*e 2

t(e use o+ #ordent tec(no*og2 t(at can ana*2@e ris% and c*ai# statistics and

co#e u) )re#iu#s t(at indi,idua* insures re1uire#ents +or reser,es/

co##issions/ e7)enses/ c*ai#s and )ro+it. T(e ,arious genera* +eatures

needed to 1uote a )re#iu# are8




<. T2)e o+ insurance9

:. Ma%e/ #ode and engine o+ t(e car9

?. C*ass o+ use9

>. Detai* o+ deri,erB age/ )(2sica* or #enta* inca)ai*it2/ dri,ing e7)erience

and #onitoring con,ictions9

F.A#ount o+ c*ai# discount a))*ica*e9 Postcode o+ owners address and

w(ere t(e ,e(ic*e is %e)t.





UNDERWRITING IN MRINE IN#URNCE

Inside story8

• Need +or #arine insurances

• Areas o+ co,erage in #arine cargo co,erage

• Cargo insurance docu#ent

• Standard +or# o+ #arine insurance

• Underwriting guide*ines and tari++s +or #arine

insurance

• Underwriting in (u** insurance

• T2)es o+ )o*icies

• !u** underwriting

54

http://images.google.co.in/imgres?imgurl=http://www.nautilus-shipping.com/Portals/33/marineinsurance.gif&imgrefurl=http://www.nautilus-shipping.com/LinkClick.aspx?link=2749&tabid=1010&usg=__eN66LMnVC9zPufPSoSTqdWjuyao=&h=243&w=186&sz=10&hl=en&start=7&tbnid=urtIYrIeXCsd7M:&tbnh=110&tbnw=84&prev=/images?q=marine+insurance&gbv=2&hl=en



UNDWERWRITING IN MARINE INSURANCE

MMarine cargo considera*2 widens t(e sco)e o+ co,erage )resent*2

en=o2ed 2 t(e insured )o)u*ation wit(out necessari*2 in,o*,ing a (ig(

)re#iu#. We co#)*e#ent our wide co,erage wit( ad,ices on Ris%

Manage#ent and Loss Pre,ention.

MRINE IN#URNCEIN#URNCE CRGO IN#URNCE CO$ER#CRGO IN#URNCE CO$ER#

TRN#IT# BY :TRN#IT# BY :

• Air

• Water

• Road or Rai*

• Registered Post Parce*

• Courier or an2 co#ination o+ t(e ao,e.

M,rine Ins+r,n-e is .or!M,rine Ins+r,n-e is .or!

u2ers/ Se**ers/ I#)ortE7)ort #erc(ants/ u2ing Agents/

Contractors and an%sBin +act an2 one engaged in t(e usiness o+ #o,e#ent

o+ goods. During t(e course o+ transit/ t(e cargo #a2 not a*wa2s e at 2our

ris%. 6or instance/ a )erson can se** it to a u2er. Our Marine Cargo Po*icies

co,er 2our interest in t(e cargo insured and a*so e7tends to co,er t(e




interests o+ an2 t(ird )art2 to w(o# 2ou (a,e assigned interest u)on trans+er

o+ owners(i)/ as deter#ined 2 t(e Ter#s o+ Sa*e.

NEED FOR MRINE IN#URNC#:

II+ t(ere is one c*ass o+ insurance t(at is an aso*ute necessit2/ it is

Marine A )ersons cargo can e da#aged on e7)osure to a wide ,ariet2 o+

ris%s/ inc*uding an accident o+ t(e ,e(ic*e carr2ing t(e cargo/ +ai*ure o+ t(e

ste,edores in t(e )ort area/ and da#age to t(e container t(at can e was(ed

o,eroard. I+ a )erson t(in%s Pirac2 is a t(ing o+ t(e )ast/ indi,idua* wi** e

sur)rised to +ind t(at t(is is ,er2 #uc( a*i,e and we** To su##aries/ cargo

can e da#aged 2 stranding/ grounding/ sin%ing/ urning/ co**isions/ +au*ts

or errors in na,igation/ (ea,2 weat(er/ entr2 o+ sea or ri,er water/ =ettison/

was(ing o,eroard/ s(i)4s sweat/ condensation/ i#)ro)er stowage 2 t(e

carrier/ (oo% da#age/ t(e+t or )i*+erage/ war/ stri%es or natura* )eri*s. T(e

Carrier )a2s +or *oss on*2 w(en t(e Carrier causes da#age. Again/ t(e




Carrier is on*2 re1uired to )a2 a *i#ited a#ount )er )ac%age and not +or t(e

+u** ,a*ue o+ t(e cargo. T(is is anot(er reason +or insuring cargo.

RE# OF CO$ERGE IN MRINE CRGO CO$ERGE:

AA ,ast #a=orit2 o+ Marine Cargo )o*icies are ased on Institute Cargo

C*auses t(at a))ears in t(ree ,ersions ,i@./ ICC -A0/ ICC -0 and ICC-C0.

ICC -A0 is ased on 4A** Ris%s4 w(i*e -0 and -C0 are ased on na#edB)eri*s.

A** t(ree c*auses (a,e certain e7c*usions.

Instit+te C,r8o C4,+ses Co@er:Instit+te C,r8o C4,+ses Co@er:

Marine Cargo Po*icies are ased/ in a #a=orit2 o+ instances/ on one or

#ore o+ t(e Institute Cargo C*auses. T(e co,erage a,ai*a*e under t(ese

standard c*auses inc*udes8

Actua* Tota* Loss

Constructi,e Tota* Loss

Particu*ar A,erage i.e./ Partia* Loss 2 an insured )eri*

Genera* A,erage

Co**ision Liai*it2

E7)enses suc( as Sur,e2 6ees/ Reconditioning Costs/ 6orwarding

E7)enses/ Sue and Laor etc.

Prin-i0,4 e-4+sions! 7;i-; ,00e,r in t;e Instit+te C,r8o C4,+ses ,re:Prin-i0,4 e-4+sions! 7;i-; ,00e,r in t;e Instit+te C,r8o C4,+ses ,re:




Loss or da#age due to In(erent Jice

Loss or da#age due to De*a2

Loss or da#age due to Insu++icienc2 o+ )ac%ing

Loss or da#age due to inso*,enc2/ +inancia* de+au*t o+ s(i) owners/ etc.

Products t(at considera*2 widen t(e sco)e o+ co,er o++ered 2 t(e

Institute C*auses. Widening t(e Sco)e o+ Co,er8 It )ro,ides a wide c(oice o+

additiona* Co,ers t(ere2 widening t(e sco)e o+ co,er e2ond w(at is

o++ered 2 Institute C*auses #entioned ao,e. So#e o+ t(e e7c*usions

a))earing in t(e Institute Cargo C*auses are eit(er de*eted or #odi+ied

considera*2.

It )ro,ides uni1ue tai*orB#ade )o*icies to suit 2our re1uire#ents. We

(a,e tai*orB#ade wordings +or a ,ariet2 o+ industriesris%s inc*uding/ ut not

*i#ited to8

6ast Mo,ing Consu#er Goods Industr2

E*ectronic Industr2

In+rastructure Pro=ects8 inc*uding De*a2 in StartBu)

Co,ers

P(ar#aceutica* Industr2

!ea*t( Care Industr2






F0 Descri)tion o+ t(e ,o2age transit

0 i** o+ Lading nu#er airwa2 i**

0 T2)e o+ insurance co,ered

0 C*ai#s )a2a*e at Signature o+ t(e )ro)oser and date o+ dec*aration.

#TDRD FROM OF MRINE IN#URNCE:

T(e standard +or# o+ t(e #arine )o*ic2 s(ows t(e +o**owing detai*s.T(e standard +or# o+ t(e #arine )o*ic2 s(ows t(e +o**owing detai*s.

<. Po*ic2 nu#er/ )*ace and date o+ issue

:. Na#e o+ assured wit( address

?. Na#e o+ t(e ,esse* carr2ing t(e insured cargo

>. Descri)tion o+ t(e ,o2age transit

F. T(e su=ect #atter insured and t(e descri)tion o+ )ac%ing

. T2)e o+ insurance co,er granted/ re+erence to re*e,ant c*ause and an2

s)ecia* conditions and warranties

. T(e su# insured

. T(e )re#iu#




K. Na#e and address o+ t(e C*ai#s Sett*ing O++ice at destination.

UNDERWRITING GUIDELINE# NDTRIFF# FOR MRINE

IN#URNCE:

WWit( t(e *iera*i@ation o+ t(e econo#2/ t(e A** Indian Marine Cargo

Tari++s/ w(ic( go,erned #arine cargo insurance/ was discounted wit( e++ect

+ro# <.>.<KK>. Now/ t(e co#)anies are +ree to +or#u*ate t(eir own rates and

ter#s. 6urt(er/ underwriting guide*ines/ a*ong wit( t(e rates were +or#u*ated.

T(e guide*ines rate ased on t(e )ro,isions o+ t(e erstw(i*e Tari++s.

T(e erstw(i*e A** Indian Marine Cargo Tari++s contains <? sections.

Present*2/ t(ese tari++s do not e7ist ut guide*ine issued 2 t(e co#)anies is

ased in t(e )ro,ision o+ t(ese erstw(i*e tari++s.

C,r8o Ins+r,n-e Under7ritin8C,r8o Ins+r,n-e Under7ritin8::

T(e acce)tance o+ cargo ris% +or t(e )ur)ose o+ underwriting in,o*,es a

care+u* assess#ent and a))raisa* o+ underwriting considerations.

Underwriting consideration are t(ose as)ects o+ +actors/ w(ic( cargo

insurance ta%e into consideration in decidingB

<. I+ it is decided to acce)t a ris%/ t(e rate o+ )re#iu# to e acce)ted.

:. T(e ter#s and conditions under w(ic( t(e ris% wou*d e

acce)ted.




?. W(et(er or not acce)t a ris%.

T(ere is no standardi@ing )ro)osa* +or# and t(e )rocedure +or cargo

underwriting. It is t(e dut2 o+ t(e )ro)oser to disc*ose a** +actors #ateria* to

t(e ris%. T(ere+ore a considera*e res)onsii*it2 de,o*,es on t(e underwriter

to #a%e a** )ertinent in1uiries re*ating to a ris%. T(e underwriter to #a%e a**

)ertinent in1uiries re*ating to a ris%. T(e underwriter s(ou*d ascertain t(e

+o**owing detai*s.

<. Na#e and address o+ t(e )ro)oser and (is usiness or trade.

:. T2)e o+ )ac%ing. I+ containeri@ed/ t(e t2)e o+ container.

?. Aut(orit2 o+ )ac%ing

>. Ja*ue o+ interest to e insured and su# to e insured

F. Na#e o+ carr2ing ,esse* or s(i))ing *ine to e used

. Insurance condition

. Ja*ue o+ interest to e insured t(e su# to e insured etc.

UNDERWRTING IN HULL IN#URNCE:

!!u** Insurance is concerned wit( t(e insurance o+ (u** and #ac(iner2

o+ ocean going and ot(er ,esse*s *i%e arger/ traw*ers/ and sai*ing ,esse*s. It

is a*so concerned wit( t(e s(i) owners ot(er insura*e interest/ %nown as

susidiar2 interest *i%e +reig(t and disurse#ent




As t(e (u** insurance is a s)ecia*i@ed c*ass o+ usiness it is )er+or#ed

at (ead o++ice *e,e*/ in India acce)t +or insurance +or +is(ing Jesse*s/

Traw*ers/ Dredgers/ In*and and Sai*ing ,esse*s/ +or w(ic( Tari++s are

a,ai*a*e. In India/ usiness co#e direct*2 to t(e (u** insurer t(ere is no

ro%er or agent in,o*,ed in ser,icing (u** insurance. T(ere+ore/ (u**

insurance in India )er+or#s a )ersona*i@ed ser,ice to t(e s(i))ing industr2.

T(e su=ect #atter o+ (u** insurance is ,esse* or s(i). T(ere are +our

#ain t2)es o+ seaBgoing ,esse*s na#e*2/

Genera* cargo ,esse*

Dr2 u*% carriers

Li1uid u*% carriers -Tan%ers0

Passenger ,esse*

H+44 r,tin8 >rene7,4s*:H+44 r,tin8 >rene7,4s*:

T(e Joint H+44 Co<<ittee in London is res)onsi*e +or t(e structure

o+ t(e oint !u** 6or#u*a/ w(ic( is a asic reco##ended +or rating renewa*

insurances in res)ect o+ s(i)s insured in London #ar%et. In India/ (e rating o+

oceanBgoing ,esse*s in a +*eet on renewa* is done 2 TAC. ased on t(e

“Indi,n Ins+r,n-e Under7ritin89 t(e a))*ication +or#s s(ou*d e

su#itted to TAC wit(in ; da2s o+ t(e renewa* date o+ t(e +*eet wit( t(e +u**




c*ai#s statistic a,ai*a*e o+ ot( )aid and outstanding c*ai#s. T(e co##ittee

deter#ines t(e renewa* rate on t(e asis o+8

T(e categor2 o+ t(e +*eet ased on t(e tota* su# insured under !u** and

Mac(iner2 interests.

6*eet e7)erience6*eet e7)erience/ i.e./ net )re#iu# and *osses )aid and outstanding +or a

stated )eriod.

TYPE# OF POLICIE#:

TT(e )ur)ose o+ (u** insurance is to co,er a s(i) owners ,arious

insura*e interests. Jarious )o*icies o++ered are as +o**ows8

H+44 ,nd M,-;inery Ins+r,n-e:H+44 ,nd M,-;inery Ins+r,n-e:

T(e )o*ic2 co,ers t(e (u**/ #ac(iner2 and e1ui)#ent and stores etc./

on oard/ ut does not co,er -,r8o&

Ins+r,n-e o. Frei8;t or nti-i0,ted Ti<e C;,r,-ter Hire P,ssen8erIns+r,n-e o. Frei8;t or nti-i0,ted Ti<e C;,r,-ter Hire P,ssen8er

<oney' Ti<e $oy,8e:<oney' Ti<e $oy,8e:

T(is )o*ic2/ su=ect to institute Ti#e C*ausesB6rig(t )ro,ides

inde#nit2 +or *oss o+ +reig(t ut e7ceeding t(e gross +reig(t *ost. T(is )o*ic2

does not co,er )artia* *oss o+ +reig(t ot(er t(an genera* a,erage *oss/ +ewer




t(an ?H un*ess caused 2 +ire/ sin%ing/ stranding or co**ision wit( anot(er

,esse*.

Loss o. Hire Ins+r,n-e:Loss o. Hire Ins+r,n-e:

T(is )o*ic2 co,ers *oss o+ (ire su++ered 2 t(e s(i) owner/ i+ t(e ,esse*/

w(ic( is gi,en on c(aracter/ is *aidBu) +or re)airs +o**owing a casua*t2

co,ered under t(e ter#s o+ t(e (u** and #ac(iner2 )o*ic2.

Loss o. Pro.it Ins+r,n-e:Loss o. Pro.it Ins+r,n-e:

T(e )o*ic2 co,ers t(e c(aracters *oss o+ )ro+its o,er t(e )eriod o+ t(e

c(aracter i+ t(e ,esse* is ti#e c(aracter/ or during t(e ,o2age c(aracter i+ t(e

,esse* is c(aracter +or ,o2age/ +o**owing tota* *oss o+ t(e ,esse*.

#;i0 Re0,irer(s Li,3i4ities:#;i0 Re0,irer(s Li,3i4ities:

T(is )o*ic2 co,ers *iai*ities o+ s(i) re)airers towards t(e owner o+ t(e

,esse*s re)aired 2 t(e#. T(e care*ess use o+ o72Bacet2*ene or we*ding

torc(es in areas w(ere oi*2 waste is *2ing or near *ines (as een a #a=or cause

o+ #an2 serious +ires. T(is as)ect an underwriter (as to care+u**2 consider.

Instit+tion ti<e -4,+ses >ITC* ;+44s:Instit+tion ti<e -4,+ses >ITC* ;+44s:

!u** insurance is granted on t(e asis o+ ti#e and ,o2age. T(e )o*icies

t(ere+ore cou*d e a Ti#e Po*ic2 or a Jo2ga Po*ic2B t(e +or#er a**ows a co,er




+or t(e res)ecti,e interests on a ti#e asisB#a7i#u# eing twe*,e #ont(s

and t(e *atter co,ers designated ,o2ages. T(e Instite o+ London

Under7riters (as introduced !u** c*auses +or Ti#e and Jo2age )o*icies. T(e

Institute Ti#e C*auses -ITC0 !u** +or# t(e asis +or #ost )o*icies used +or

insurance o+ ,esse*s and t(eir #ac(iner2.

HULL UNDERWRITING:HULL UNDERWRITING:

As a )re*i#inar2 to t(e acce)tance o+ (u** ris%s/ a du*2 co#)*eted

)ro)osa* +or# is otained +ro# t(e s(i) owner. T(e detai*s re,ea*ed in t(e

)ro)osa* +or#/ and t(e answer to t(e additiona* 1uarries/ ena*e t(e

underwriter to assess t(e ris%s +ro# t(e )oint o+ ,iew o+ )(2sica* (a@ard/

1ua*it2 o+ #anage#ent and #ora* (a@ard as)ects/ w(ic( are t(e #ost

i#)ortant +actors. T(e underwriter wi** ta%e into account t(e +o**owing

as)ects o+ t(e ris% )ro)osed.




JOB PRO#PECT#:


Inside story8

• o )ros)ects

• Earnings

•

Re*ated occu)ations• Sources o+ additiona* in+or#ation

• IT3 in underwriting

O$ER$IEWO$ER$IEW

67



E#)*o2#ent o+ underwriters is e7)ected to increase #ore s*ow*2 t(an

t(e a,erage +or a** occu)ations t(roug( :;;. Co#)uterBassisted so+tware

t(at (e*)s underwriters ana*2@es )o*ic2 a))*ications #ore 1uic%*2 and

accurate*2 (as #ade underwriters #ore )roducti,e and ca)a*e o+ ta%ing on

a greater wor%*oad. Mergers and ac1uisitions o+ insurance co#)anies are

a*so e7)ected to continue to resu*t in #ore downsi@ing o+ insurance carriers.

Most =o o)enings wi** resu*t +ro# t(e need to re)*ace underwriters w(o

trans+er or *ea,e t(e occu)ation/ a*t(oug( se,era* new =o o)enings are

eing created +or underwriters in t(e area o+ )roduct de,e*o)#ent. T(ese

underwriters (e*) set t(e )re#iu#s +or new insurance )roducts/ suc( as in

t(e growing +ie*d o+ *ongBter# care insurance.

T(e est =o )ros)ects wi** e +or underwriters wit( t(e rig(t s%i**s

and credentia*s/ suc( as e7ce**ent co#)uter and co##unication s%i**s/

cou)*ed wit( a ac%ground in +inance. o )ros)ects #a2 e etter in (ea*t(

insurance t(an in )ro)ert2 and casua*t2 and *i+e insurance. As 6edera* and

State *aws re1uire (ea*t( insurers to acce)t #ore a))*icants +or insurance/

t(e nu#er o+ )o*icies so*d wi** increase. A*so/ as t(e )o)u*ation ages/ t(ere

wi** e a greater need +or (ea*t( and *ongBter# care insurance.

ecause insurance is considered a necessit2 +or )eo)*e and

usinesses/ t(ere wi** a*wa2s e a need +or underwriters. It is a )ro+ession

t(at is *ess su=ect to recession and *a2o++s t(an ot(er +ie*ds. Underwriters/


http://www.umsl.edu/services/govdocs/ooh20002001/375.htm






w(o s)ecia*i@e/ t(oug(/ #a2 (a,e di++icu*t2 trans+erring to anot(er

underwriting s)ecia*t2 i+ downsi@ing were to occur.

ERNING#:

Median annua* earnings o+ insurance underwriters were ?/<; in

<KK. T(e #idd*e F; )ercent earned etween :K/K; and F</>; a 2ear.

T(e *owest <; )ercent earned *ess t(an :?/F;9 w(i*e t(e to) <; )ercent

earned o,er />?;. Median annua* earnings in t(e industries e#)*o2ing t(e

*argest nu#er o+ insurance underwriters in <KK were8

Insurance co#)anies usua**2 )ro,ide etter t(an a,erage ene+its/ inc*uding

e#)*o2erB+inanced grou) *i+e/ (ea*t(/ and retire#ent )*ans.


Medica* ser,ice and (ea*t( insurance >;/;;;

Li+e insurance ?K/;;

6ire/ #arine/ and casua*t2 insurance ?K/<;;

Insurance agents/ ro%ers/ and ser,ice ?:/:;;

69



RELTED OCCUPTION#:

Underwriters #a%e decisions on t(e asis o+ +inancia* data. Ot(er

wor%ers wit( t(e sa#e t2)e o+ res)onsii*it2 inc*ude auditors/ udget

ana*2sts/ +inancia* ad,isers/ *oan o++icers/ credit #anagers/ rea* estate

a))raisers/ and ris% #anagers.

#OURCE# OF DDITIONL INFORMTION:

Disc*ai#er8 Lin%s to nonBLS Internet sites are )ro,ided +or 2our

con,enience and do not constitute an endorse#ent. In+or#ation aout a

career as an insurance underwriter is a,ai*a*e +ro# t(e (o#e o++ices o+

#an2 *i+e insurance and )ro)ert2B*iai*it2 insurance co#)anies.

In+or#ation aout careers in t(e )ro)ert2Bcasua*t2 insurance +ie*d can e

otained 2 contacting8

T(e Insurance In+or#ation Institute/ <<; Wi**ia# St./ New "or%/

N" <;;?. Internet8 In+or#ation on t(e underwriting +unction/ in

)articu*ar/ and t(e CPCU and AU designation can e otained +ro#8

• T(e A#erican Institute +or C(artered Pro)ert2 and Casua*t2

Underwriters/ and t(e Insurance Institute o+ A#erica/ :; Pro,idence

Rd./ P.O. o7 ?;</ Ma*,ern/ PA <K?FFB;<.














• An industr2 e#)*o2ing insurance underwriters t(at a))ears in t(e

:;;;B;< Career Guide to Industries: Insurance.

“IT9 IN UNDERWRITING:

Auto #ating t(e underwriting )rocess/ etter ana*2sis o+ ris% and

i#)ro,ed decision #a%ing are so#e o+ t(e issues t(e insurance industr2 is

gra))*ing wit(. T(ese issues *ead to reduced )ro+its and *ess e++icient usiness

)er+or#ance.

At data#atics/ t(e e7)ertises are (e*)ing *eading g*oa* insurance

co#)anies wit( t(eir underwriting needs. T(e2 (a,e de,e*o)ed wor*d c*ass

so*utions t(at enco#)ass data ca)ture/ ris% ana*2sis and #anage#ent and

decision su))orts ai*it2.

T(e2 o++er a co#)re(ensi,e set o+ ser,ices in t(e underwriting area8

Maintenance and su))orts o+ *egac2 s2ste# and a))*ications.

Migration +ro# )ro)rietar2 s2ste# to o)en )*at+or#

New a))*ication de,e*o)#ent.

Custo#i@ation o+ standard so+tware )ac%ages.

Moderni@ation o+ *egac2 a))*ication t(roug( de,e*o)#ent o+

EBco##erce and we ased a))*ication.






Ris= n,4ysisD,t, -,0t+re

De-ision s+00ort Under7ritin8

R+4es

Mi8r,tion

Moderni,tion

Ne7 ,004i-,tion

de@e4o0<ent

T(e2 (a,e a tea# o+ do#ain and tec(nica* e7)erts +ocused on

)ro,iding t(e est )ossi*e so*utions to t(e custo#er.

T(e tea# o+ e7)erts (as de*i,ered se,era* i#)ortant ene+its to t(e

custo#ers/ inc*uding8

Increased re,enues 2 ??H o,er se,en 2ears

I#)ro,ed decision su))ort

Increased )ro+itai*it2 2 <FH

Increased e++iciencies 2 :;H at *owered costs







<. Underwriting eing t(e +oundation o+ t(e insurance usiness. It (as an

i#)ortant ro*e in a))raising t(e 1uantitati,e and 1ua*itati,e as)ect o+ ris%.

T(e underwriter (as to see to it t(at t(e ris% is )ro)er*2 assessed.

:. It is a*so seen t(at underwriting ru*es +or di++erent )o*icies and categories

are di++erent. T(e #edica* e7a#ination is o+ great i#)ortance in

underwriting. It (e*)s to assess t(e a#ount o+ ris% t(at a )erson carries.

?. T(e underwriter (as to e ,er2 care+u* w(i*e underwriting t(e a))*ication

o+ sustandard *i,es. An2 ad decision o+ underwriter can (o*d (i# *ia*e

+or t(e sa#e.


CONCLU#ION

74







o*igation onds 2 a co##ercia* an% or dea*er an% +or its own

account/ or +or resa*e to in,estors.

F. UUnderwriting #a2 a*so re+er to insurance9 insurance underwriters

ca*cu*ate (ow ris%2 it is to insure )eo)*e and usinesses.




ig goa*s re1uires t(e acco#)*is(#ent o+ #an2 *itt*e goa*s3

T(us to acco#)*is( #2 )ro=ect I (a,e re+erred #an2 ot(er secondar2

data sources. T(e2 are as +o**ows8

REFERENCE RELTED TO BOO%#:

)& N,<e: Under7ritin8 M,n,8e<ent:

Pu*is(ers8 IC6AI Uni,ersit2 )ress.

/& N,<e: Indi,n Ins+r,n-e' ABPro+i*e gi,en 2

Aut(or !.Nara2ana

Pu*is(ers8 aico Pu*is(ing !ouse


BIBLOGRPHY

78



1& N,<e: Ins+r,n-e M,n,8e<ent'Prin-i04es ,nd 0r,-ti-es gi,en 2

Aut(orsB%ara# )a*/ .S. od*e

Pu*is(ers8 Dee) and Dee) )u*ication PJT. LTD.

REFERENCE RELTED TO MGINE#:

<. Insurance C(ronic*e/ une :;;.

:. Treasur2 Manage#ent/ u*2:;;.

REFERENCE RELTED TO WEB#ITE:

<. www.goog*e.co#.

:. www.#otorinsurance.co#.








?. www.2a(oo.co#.

>. www.#sn.co#

F. www.wa%i)edia.co#

. www.ans.co#

http://www.yahoo.com/

http://www.msn.com/

http://www.wakipedia.com/

http://www.ans.com/

http://www.yahoo.com/

http://www.msn.com/

http://www.wakipedia.com/

http://www.ans.com/

Date post:	04-Jun-2018
Category:	Documents
Upload:	karishma-kolhe
View:	216 times
Download:	0 times

Underwritting in Insurance Sector

Documents