Who are the main participants in the insurance market?
Buyers, insurers, intermediaries, aggregators, and reinsurers.
What are the types of insurers by ownership?
Proprietary companies: owned by shareholders
Mutual companies: owned by policyholders
Mutual indemnity associations: self-managed pools (e.g. P&I clubs)
Captive insurers: set up by a parent company to insure its own risks
Protected Cell Companies (PCCs): captive insurers with separate cells
What are the types of insurers by function?
Composite insurers: cover multiple classes of business
Specialist insurers: focus on one class
Takaful insurers: Sharia-compliant, based on mutuality and cooperation
The State: provides welfare/pension cover and guarantees for terrorism/flood risks
What is Lloyd’s and how does it operate?
Lloyd’s is a marketplace, not an insurer. It consists of syndicates backed by members (Names), managed by managing agents. Members’ agents advise investors. Lloyd’s brokers place risks using Market Reform Contracts (MRCs).
What is contract certainty?
Complete agreement of all terms before the insurance starts, with documentation provided promptly.
What are insurance intermediaries and how are they regulated?
Intermediaries connect buyers and insurers. They must be authorised by the FCA or operate as Appointed Representatives (ARs) or Introducer Appointed Representatives (IARs).
What services do independent intermediaries provide?
Market selection, negotiation, policy advice, renewals, claims support, premium collection, and issuing cover notes.
What is delegated authority and why do insurers use it?
Insurers allow intermediaries to issue cover within limits to gain a steady flow of business.
What is bancassurance?
An arrangement where banks sell insurance products, offering efficiency and market access.
What are price comparison websites (PCWs)?
Web tools that aggregate quotes from multiple insurers using one question set.
What is reinsurance and why is it used?
Insurance for insurers to spread risk, smooth results, protect portfolios, and support new business.
What are the types of reinsurers and UK reinsurance centres?
Types: specialist reinsurers, Lloyd’s syndicates, insurance companies.
Centres: Lloyd’s and the International Underwriting Association (IUA).
What does an underwriter do?
Assess risks, accept or reject risks, set terms and premiums
What does claims personnel do?
Handle claims fairly, detect fraud, reserve funds, involve experts, minimise expenses
What does a loss adjuster do?
Handles claims for the insurer, ensuring fair settlements. Member of CILA
What does a loss assessor do?
Handles claims for the insured, preparing and negotiating on their behalf
What does a surveyor do in insurance?
Advises on immediate actions, recommends underwriting changes, checks compliance
What does an actuary do?
Uses statistics to predict losses, claims, and ensure solvency
What does a risk manager do?
Identify and control risks, advise management, transfer risks via insurance or contracts
What does a compliance officer do?
Ensure regulatory compliance, train staff, report to FCA, maintain manuals, act as money laundering officer
What does an internal auditor do?
Assess risk management and governance, review internal controls, advise on improvements, support Solvency II compliance
What is the Motor Insurers’ Bureau (MIB)?
Compensates victims of uninsured/untraced drivers and manages data and claims.
What are personal and commercial lines insurance?
Personal lines: cover individuals (e.g. motor, home, travel)
Commercial lines: cover businesses (e.g. property, liability)
What is Insurance Premium Tax (IPT)?
A tax on general insurance premiums: 12% standard, 20% higher rate for certain products.
