Question 1:
List the major areas of risk and uncertainty facing a general insurer.
Question 2:
a) Explain the difference between co-insurance and reinsurance
b) Airports Ltd is looking to insure its portfolio of Rs10bn. Its broker has proposed two options:
Option 1: Airports Ltd co-insures the risk with insurers A & B, each taking 50%. The insurers each have a quota share reinsurance arrangement where they cede 25% of each risk.
Option 2: Airports Ltd insures 100% of the risk with insurer C. The insurer has a 50/50 quota share reinsurance agreement with its reinsurer.
Assuming the reinsurer of all three companies fail to pay their share of the reinsurance recoveries, how much would each of insurer A, B and C be liable in the event of a claim of Rs 1bn?
Question 3:
State the reasons why a general insurer would analyse its claims data
Question 4:
Describe the consequences for a general insurance company of setting inappropriate levels of technical reserves.
Question 5:
List the FSC requirements with which general insurance companies must comply and explain how each serves to protect policyholders and the industry at large.