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PCE – Part B General Insurance

PCE – Part B General Insurance. Revision 01 (25/11/2011). CHAPTER 14 . CHARACTERISTICS OF GENERAL INSURANCE PRODUCTS (OVERVIEW). How much do you understand about General Insurance ?. Share only 1 point about GI that comes across to your mind…. CHAPTER 14 : CHARACTERISTICS OF GENERAL

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PCE – Part B General Insurance

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  1. PCE – Part B General Insurance Revision 01 (25/11/2011)

  2. CHAPTER 14 CHARACTERISTICS OF GENERAL INSURANCE PRODUCTS (OVERVIEW) How much do you understand about General Insurance? Share only 1 point about GI that comes across to your mind…

  3. CHAPTER 14 : CHARACTERISTICS OF GENERAL INSURANCE PRODUCTS (OVERVIEW) • 9.1 Introduction • 9.2 Characteristics of General Insurance Products

  4. 14.1 : Introduction • General insurance provides cover against risks usually not covered by life insurance. • In general, not every policy will eventually • become a claim.

  5. 14.2 : Characteristics of General Insurance Products • General insurance contracts are short-term contracts • with varying premiums at renewals. • General insurance contracts are contracts of indemnity. • Payment of a claim does not terminate a general • insurance contract • The risk to be insured does not necessarily increase with time

  6. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

  7. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS How many classes of General Insurance available in the market? Please name me 1…

  8. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS • 15.1 Marine Insurance • 15.2 Fire Insurance • 15.3 Motor Insurance • 15.4 Miscellaneous Accident Insurance • 15.5 Types of Takaful Business

  9. 15.1 : Marine Insurance Type of policy Subject matter of insurance • - Hull • Cargo • Freight • - Building Risk • - Vessel, machinery & limited • collision liability • Cargo (goods carried on the vessel) • Freight (money/fee charged for carriage of goods by the vessel) • - Vessel under construction

  10. 15.1 : Marine Insurance Institute Cargo Clauses B Institute Cargo Clauses A Institute Cargo Clauses C

  11. 15.1 : Marine Insurance Clauses Perils A B C   Striking, stranding, capsizing Fire, explosion, collision   Earthquake, volcanic eruption, lightning    Jettison, general average & salvage   Discharge of cargo at port of distress  

  12. 15.1 : Marine Insurance Clauses Perils A B C Washing overboard   Entry of sea water into vessel   Total loss of package(loading/discharge)    Pirates and thieves    Deliberate damage or destruction  

  13. 15.2 : Fire Insurance Consequential Loss Fire Insurance Householder Houseowner

  14. 15.2 : Fire Insurance Type of policy Subject matter of insurance - Fire - Houseowner - Householder - Consequential Loss - Buildings and contents - Private dwellings - Household content - Insured’s profit

  15. # #   CHAPTER 15 10.2 : Fire Insurance A: Standard Fire B: Standard Houseowner C: Standard Householder Perils A B C Fire, lightning, explosion (domestic gas)   War, nuclear    Burning of property by authority    Earthquake, volcanic eruption Subterranean fire, flood #: Extension is available

  16. # # #    15.2 : Fire Insurance A: Standard Fire B: Standard Houseowner C: Standard Householder Perils A B C Aircraft damage, impact damage Overflowing of water tanks Removal of debris, architect fee, rental #  Typhoon, hurricane, windstorm  # ## Burning of forest & bush lallang #: Extension is available, : Extension with condition

  17. 15.2 : Fire Insurance A: Standard Fire B: Standard Houseowner C: Standard Householder Perils A B C # ## Fermentation, natural heating ### Spontaneous combustion ## # Riot, strike and malicious damage ## # Subsidence or landslip ### Plate glass #: Extension is available, : Extension with condition

  18. 15.2 : Fire Insurance (Consequential Loss) Basic Cover (i) Loss of gross profit due to reduction of turnover (total amount of goods or services sold) (ii) Additional expense to minimize loss of turnover Exclusion Similar to fire policy Extension (i) Similar to fire policy (ii) Loss of gross profit arising from business interruption in other’s premises

  19. 10.3 : Motor Insurance (Types of Vehicles) Commercial Vehicle Private Car Motorcycle

  20. 15.3 : Motor Insurance (Types of Cover) Third Party Only Act Only Third Party, Fire & Theft Comprehensive

  21. 15.3 : Motor Insurance (Types of Cover) Act Only Death/Bodily injury to 3rd party 3rd Party Cover Act only + 3rd party property 3rd Party, Fire & Theft 3rd Party + Loss/Damage to insured vehicle by fire or theft Comprehensive 3rd Party, Fire & Theft + Accidental Damage + medical Expense + Personal Accident

  22. 15.4 : Miscellaneous Accident Insurance Theft Insurance Liability Insurance Personal Accident Fidelity Guarantee Engineering Insurance Aviation Insurance

  23. 15.4.1 : Theft Insurance All Risks Insurance Burglary Insurance Money Insurance Goods in Transit

  24. 15.4.2 : Liability Insurance Workmen’s Compensation Products Liability Employers’ Liability Professional Indemnity Public Liability

  25. 15.4.3 : Personal Accident (Types of Benefit) Permanent Disablement Death Medical Expenses Temporary Disablement

  26. 15.4.4.1 : Fidelity Guarantee (Types of Policies) Collective Policy Individual Policy Blanket Policy

  27. 15.4.4.2 : Bonds (The 3 Parties) Contractor Employer Surety (Insurer)

  28. 15.4.5 : Engineering Insurance Boiler Explosion Machinery Breakdown Erection All Risks Contractors’ All Risks Electronic Equipment

  29. 15.4.6: Aviation Insurance Personal Accident Freight Liability Loss of Licence

  30. 15.4.7 Medical And Health Insurance (MHI) • A policy of insurance on disease, sickness or medical expense that provides specified benefits against risks of persons becoming totally or partially incapacitated as a result of sickness or accident. • Policy benefits are usually paid out in the manner according to the policy type or cover purchased as follows: • reimbursement of medical expenses • lump sum payment of the sum insured, or • an allowance for the period the policyowner is hospitalized.

  31. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS • Basic Cover 1) Hospitalization and Surgical Insurance. - Common Policy Extensions/ Benefits: a) Outpatient Clinical Insurance b) Maternity Benefit 2) Major Medical Insurance 3) Dread Disease/ Critical Illness Insurance 4) Disability Income Insurance 5) Hospital Income Insurance

  32. CHAPTER 15 • Policy Benefit Limitations c. Co-payments a. General Waiting Period Shall not exceed 30 days from policy effective date b. Specified Illnesses Shall not exceed 120 days from policy effective date

  33. CHAPTER 15 • Exclusions • Pre-existing conditions • Congenital abnormalities or deformities including hereditary conditions • Plastic/ Cosmetic surgery, circumcision and eye examination • Pregnancy, childbirth, miscarriage and abortion • Disabilities arising out of duties of employment that are covered under workmen’s compensation insurance

  34. CHAPTER 15 • Exclusions 6)Psychotic, mental or nervous disorders 7) Sickness or injury arising from racing of any kind (except foot racing) 8) Expenses incurred for sex changes 9) Investigation and treatment of sleep and snoring disorders, hormone replacement therapy and alternative therapy 10)Costs of services of a non-medical nature such as television,telephones etc 11) Private flying other than as a fare paying passenger

  35. CHAPTER 15 • GolfersInsurance Basic Cover 4)Hole in one expenses 1) Liability to the public 3)Golfing Equipment/ Golf Clubs 2) Personal Accident

  36. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS • Exclusions • War risks, riot strike and civil commotion • Wear & Tear, depreciation, gradual deterioration or any process of repairing • Loss destruction/ Damage directly caused by or contributed to by or arising from radioactive or nuclear risks • Terrorism risk

  37. CHAPTER 15 CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS • 15.5 : Takaful Business • General Takaful business is all takaful business which is • not Family Takaful Business • General Takaful scheme is short-term Tabaruk Contract • Participants in the scheme agree to pay entire • contributions to create General Takaful Fund • After deducting operational costs, the surplus shall be • shared between participants and Takaful company • according to Principle of Mudharabah

  38. CHAPTER 16 PRACTICE OF GENERAL INSURANCE- RISK ASSESSMENT, UNDERWRITING & RATING

  39. CHAPTER 16 PRACTICE OF GENERAL INSURANCE- RISK ASSESSMENT, UNDERWRITING& RATING Who are involving in the process of Underwriting?

  40. CHAPTER 16 PRACTICE OF GENERAL INSURANCE- RISK ASSESSMENT, UNDERWRITING& RATING • 16.1 Underwriting • 16.2 The Underwriting Process • 16.3 Determination of Premiums, Terms & Conditions • 16.4 Confirmation of Acceptance • 16.5 Reinsurance & Coinsurance • 16.6 Rating • 16.7 Minimum Premium • 16.8 Minimum Sum Insured • 16.9 Refund of Premium • 16.10/12 How to Use Tariff

  41. CHAPTER 16 16.1 : Underwriting • The purpose of underwriting is to • - Guard against anti-selection • - Charge a premium that is commensurate with the • risk transferred • When anti-selection exists within a class of risks, the • actual loss will be greater than the expected loss • because the class of risks does not represent a • randomly selected group (Law of Large Number)

  42. CHAPTER 16 16.2 : The Underwriting Process • Underwriting can be defined as: • - A process of assessment and selection of risks • - Determination of premium, terms and conditions

  43. CHAPTER 16 16.2 : The Underwriting Process - Physical Hazards - Type of construction, Height of Building - Nature of Flooring, Type of Occupancy etc Fire - Type of vehicle, Cubic capacity, Use of Vehicle - Age & condition of vehicle, Modification on Vehicle Motor - Nature of Stock, Situation - Type of Construction, Security Precaution Burglary - Age of Person, Type of Occupation - Health & Physical Condition, Hobbies Personal Accident

  44. CHAPTER 16 16.2 : The Underwriting Process- Moral Hazards Unreasonableness Carelessness Fraud

  45. CHAPTER 16 16.3 : Determination of Premiums, Terms & Conditions Risk Improvement Warranties Exclusion Restricted Cover Excess Franchise

  46. CHAPTER 16 16.4 : Confirmation of Acceptance • If the terms and conditions are acceptable to proposer, the insurer will usually issue cover note as evidence of temporary cover.

  47. CHAPTER 16 16.5 : Reinsurance & Coinsurance • Reinsurance is an arrangement where the insurer • reinsures/cedes the part of risk assumed which is in excess of his retention to reinsurer • Coinsurance is an arrangement between two or more insurers to share original risk

  48. CHAPTER 16 16.6 : Rating Individual Class Merit

  49. CHAPTER 16 16.7/8 : Minimum Premium /Minimum Sum Insured Minimum Premium RM 50 Fire RM 50 Private Car Motorcycle RM 20 RM 35 Workmen Compensation

  50. CHAPTER 16 16.10/12 : How to Use Tariff Workmen Compensation Fire Motor

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