Reinsurance Essay

business of insurance. But the lack of uniformity, loop holes, blind spots and deficiencies within

American International Group, Inc. is a multinational insurance organization with more than 88 million customers in over 130 countries. AIG currently has over 64,000 employees that help consumers protect and secure their future with their insurance services. The services and products include property casualty insurance, life insurance, retirement products, mortgage insurance and other financial services (AIG.com). AIG is one of the most recognizable insurance organizations worldwide. AIG’s success is due to numerous reasons, both internally and externally. Our team has chosen this business to investigate the recent events of AIG and also analyze their strengths, weaknesses, opportunities and threats.

Insurance is an arrangement by which a company gives customers financial protection against loss or harm such as theft and illness in return for premium payments. One of the most important ways that external economic factors are affecting insurance industries is by experiencing a slow pattern in the economy. Insurance companies are affected by lower sales and lower rates of returns on their investments. Companies have to sell certain products for which they have the commitment and the

In order for a company to establish the correct balance between their risk-retention and risk-transfer they must first complete a risk-retention analysis. This analysis allows an organization to establish their maximum level of risk retention. This is accomplished through a combination of the traditional analysis of principles based on investment and decision, along with pricing according to the insurance industry. The results of this analysis show the cost-effectiveness and trade-off of savings on premiums versus the increased risk of a higher retention level. Now that the company has successfully established the basic parameters of being self-insured ,with assistance from their actuary, "an individual that specializes in the measurement and management of risk"(www.soa.org) and their commercial insurance broker; the most cost-effective type of risk retention must be established. Commercial insurance companies often dictate clients that are self-insured as to what type of risk-retention the company will assume. This occurs because once the self-insured clients maximum limits have been reached it is at this point the commercial insurance company assumes responsibility for any remaining amount of a claim. There are several types of strategies of risk-retention that companies can assume when self-insured that fall within the established boundaries of the commercial insurance market. Each self-insured company has its own unique risk-retention capacity specific to their

It is the top consideration of insurance companies when they underwrite the policy and calculate the rate.

Engendering a vast array of undesirable outcomes, including setting into motion a host of unpredictable collateral damage akin to falling dominoes, one poorly orchestrated strategic decision gone awry can have far-reaching effects. Even the best-laid plans can become casualties of immitigable disruption, disaster or destruction. And for this reason, the insurance industry retains significant influence around the globe by fiscally protecting people and entities on a broad range of applications covering healthcare, infrastructure, intellectual property and even errors made by third-parties. Part of risk mitigation strategies, insurances serve their customers well as an indemnifier. However, they don’t guarantee an outcome. Nor would they somehow reverse devouring years of someone’s life, destroying their

Jim Leatzow has over 42 years of property and casualty insurance industry and agency experience. During those years, Mr. Leatzow has spent 27 years managing and underwriting at a national level, 13 years in re-insurance, 21 years as a national third party administrator, focusing on claims handling and adjusting. He was a licensed producer and surplus lines broker in 50 States as well as D.C. up until October 2005. Finally, Mr. Leatzow is a certified insurance and re-insurance arbitrator. A copy of Mr. Leatzow’s curriculum vitae is attached hereto as Exhibit 1.

The tool that insurance companies use to balance this complex financial equation is their premium. For example, with larger providers, a five million dollar deficit could be remedied by raising every policy holder's auto insurance by a few dollars. Conversely, in a year of good fortune for the company, they could lower their premiums and still show the required profit. Over time, these adjustments can create significant differences between competing insurance companies.

As presented previously, a captive reduces long-term costs and operating costs, provides investment income and profit which are only taxed when repatriated, provides for broader more stable coverage, direct re-insurance access, and fewer regulatory restrictions. The disadvantages include long-term capitalization commitment, internal administrative costs, potential for inadequate reserving, and complex taxation issues. Mercer’s management has not been inclined to form a captive therefore we will only recommend one if it becomes necessary in order to obtain reasonable renew terms. This may become more pressing since the market for large transportation risks has been shrinking. We are uncertain whether we will be able to find an insurance carrier willing to provide policies for the coverage required by Mercer without the use of a captive. An example of this would be the inability to obtain a primary Trucker’s Liability or Automobile Physical Damage quote on any basis other than pure

Insurance is am agreement between two parties in which one party promises to compensate for future losses in return for a reoccurring payment. It protects an entity (such as an individual or company) against unexpected losses. Some forms of insurance are compulsory by law whilst others are optional. An insurance policy is a contract between the insured and the insurer. In the case of a certain event, the insurer agrees to pay the insured a lump sum of money in exchange for a monthly premium.

Good afternoon ladies and gentleman. Welcome to the presentation. Today, I am going to discuss the following question: ”How being constantly original supports Lloyd’s to remain the leading insurance market?”

They were exploring plans to expand their business by selling insurance in other states such as, Arizona, Nevada and Oregon. The company was also looking at the idea of possibly changing the company's name, in light of the newly approaching 21st Century. However, all its plans for growth were immediately put on hold due to the January 17, 1994, magnitude-6.7, Northridge Earthquake that cost the company over $1,065 billion.

Answer: Property and casualty insurance protects property (houses, cars, boats, and so on) against losses due to accidents, fire, disasters, and other calamities. Property and casualty policies tend to be short-term contracts and, that’s why the subject to frequent renewal is, and one more characteristic feature is the absence of savings component. Property and casualty premiums are based on the probability of sustaining the loss. To estimate the key determinant of the price of an insurance policy, i.e. risks, insurance companies take third-party proceedings that develop models of catastrophe loss probabilities. Based on the numbers form Exhibit 5 of the case we see that

In 2012, that market grossed U.S. $ 252.4 billion in direct premiums of insurance, health insurance, pension contributions and savings bonds. Such awards and contributions served to increase provisions amounting to R$ 420 billion, which represented 5.69 % of GDP. Provisions have also secured the payment of compensation of claims, welfare benefits and redemption of pension plans and capitalization of R $ 135.2 billion in 2012 (3.05% of GDP). The importance of the sector exceeds, by far, the numeric expression. Indeed, everyday life, as we know since the Industrial Revolution, would be impossible without insurance. The companies could not take risks as they do at present, so your investment would be severely restricted and, with them, the future expansion of the economies. Entire markets would collapse: just imagine what would happen with the sale of cars, with the credit market and the trade if there was not the support of insurance. The insurance industry, increasingly supplements the State in providing critical services in health and social security, and in doing so, allows the state to focus attention and resources on meeting the needs of the poorest sectors of the population.

It is now day’s world’s largest and most successful reinsurance of manmade and natural catastrophe. Renaissance’s management expertise, sophisticated risk models, responsive client service and discipline underwriting approvals have made a reputation for excellence.