Chapter 5 v.2

Question 1

Functions within insurance companies

What is the function of the strategy team?

Answer 1

If an insurer is large enough, it may have a permanent team of strategy planners/ senior managers who will do research on behalf of the board

Question 2

Functions within insurance companies

What does the strategy team do?

Answer 2

Will use SWOT.
Will determine if its a good merger or acquisition
Will launch new projects
Will research new territories
will look at different distribution channels

Question 3

Functions within insurance companies

What do acturaries do

Answer 3

They look at the following:

• pricing to predict loss ratios for backing of a business
• reserving (not claims)
• modelling specialists- what impact storm or flood would have on a portfolio
• Solvency capital

Question 4

Functions within insurance companies

What do the risk management team do

Answer 4

They look to identify, analysis and control risks. They understand all aspects of the business

Question 5

Functions within insurance companies

What areas of risk do the risk management team do?

Answer 5

Inherent risks
Residual risks
Risk ranking
Risk register

Question 6

Functions within insurance companies

What does a risk manager look at

Answer 6

• Strategic risk
• insurance pricing and reserving risk
• investement/ market risk
• credit risk (not being paid premium/ not being reimbursed by reinsurer)
• operational risk- not enough staff/ need better staff. (Can also be function manager
• group risk