WinsurTech Blog | Insurance Concepts and Practical Solutions

What is P & C insurance?

Author - Webner
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11:25 am
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Property and Casualty insurance (or P & C as it is usually called), are the types of insurance that cover the following:

Property – Property insurance protects the insured against financial consequences of damage to the property of every kind that is insured like building, automobile, marine etc.

Casualty – Casualty insurance protects the insured against the financial consequences of legal liability – like death, injury or disability to another person due to accident in which insured is found at fault. It also includes protecting against the cost of repair to the affected person’s property. For example in a car accident if […]

Deductible, Elimination Period (Waiting Period) and Coinsurance

Author - Webner
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2:08 pm
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Suppose someone has a medical insurance policy from an insurer. He visits hospital and bill is of $25. He claims it from the insurance company. Company pays but they incur $400 on the formalities (paperwork for example) to grant $25. Hence it costs the company $425. From where these $400 be recovered? One way to recover such expenses is to raise the policy premium, but that would mean raising the expenses for the customer (or losing potential customers). An alternative for insurance company is to tell the customer upfront at the time of policy purchase that small expenses up to […]

Understanding Insurance Policy Downloads

Author - Webner
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11:09 am
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Policy Downloads is the process of bringing policy related information and transaction details from Insurance Carriers into agency management system in use by the agency. An insurance agency can sell policies of several different insurance carriers (like Hartford, Progressive etc). Insurance policies also undergo changes from time to time like renewals, cancellation, reinstatement, endorsements etc. These are the transactions. This list of transactions is recorded at insurance company’s end (carrier’s end). How to bring this information from each carrier and consolidate into Insurance agency’s database or CRM or agency management system? This requirement is called as Policy […]

What is Insurance Policy Reconcile or Policy Reconciliation?

Author - Webner
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1:00 pm
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When polices are downloaded from carriers (like through IVANS downloads, EBix Team-up Downloads or other 3rd party download applications) what should be done with each policy? Basically policy download actually means policy transactions download. Each downloaded record is a transaction related to a policy. For example policy Renewal (RWL – renewal of an existing policy), Non-Renewal (RWX – user decides to not to renew an existing policy), New Business Issue (NBS – new policy), Rewrite (REW – cancelling and rewriting an existing policy with modifications), Cancellation (XLC – cancel existing ongoing policy), Policy Change (PCH – endorsements or changes to an existing policy) or […]

What does Indemnity mean in insurance?

Author - Webner
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2:18 pm
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Indemnity in insurance means in case the loss (financial or death) happens the insurer has to bring the state (in whole or part) of the insured back to what it was prior to the loss. Indemnity is the obligation that one party holds in paying compensation to another party that suffered losses. For example if a car accident happens insurer has to pay the car repair charges in part or whole according to the terms of car insurance policy. In case of life insurance if the insured dies, insurance company has to indemnify the family of insured with life insurance […]

What is Insurable Interest

Author - Webner
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1:14 pm
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Insurable interest means if the person who wants insurance to be done has any interest in the item being insured or not. For example a human being has natural interest in own life and health (mostly), similarly he has financial interest in his property and car, he has interest in his loved ones and in his business.Therefore it makes sense for the person to insure his own life and health, his property, car, to buy life and health cover for his loved ones and business. An insurance company (carrier like Travelers, Metlife, State Farm, Safeco) wants to insure only […]

Law of Large Numbers in Insurance

Author - Webner
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2:11 pm
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Law of Large Numbers is the basis for successfully running Insurance Business. If historical data is collected for several years for life insurance for example and the information like how many people died during the policy, how many claims were made etc is available then it can be deduced that on average what is the percentage of claims that will possibly be made for an insurance policy (with certain deviation of course). On this basis cost can be calculated and premium amount can be decided. This same concept applies to Car insurance, property insurance, health and other types of insurance […]

Understanding Perils and Hazards in Insurance

Author - Webner
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2:07 pm
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0 Comments
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In Life insurance the risk is that person may die before the insurance policy matures. In Car insurance the risk is that car may get damaged during the tenure of the policy. How can the person die? Person may die of fever, heart attack in an accident or by falling off a building for example. How can a car get damaged? A Car’s part may become faulty or it may crash for example. These possible causes of the occurrence of the loss or risk are called as Perils. So Perils are the causes that can result in materialization of […]

Understanding Speculative and Pure Risk in Insurance

Author - Webner
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2:49 pm
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Insurance is to cover the financial risk but what type of risk can be insured? Can risk in gambling be insured or a startup business or a stock investment? No because risk in such endeavours is with the intention to make gains. What if the gain is not made, should the insurance company reimburse in such a case? No, hence such risks cannot be insured. These are known as speculative risks in insurance terminology. What about risks that can be covered? Like a vehicle can be insurance, a person’s life can be insured and a building can be insured […]

Insurance Overview

Author - Webner
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9:54 am
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Business of insurance runs on probability. If there are 10000 cars each driven by a different driver, there is a certain possibility (risk) that 1 or more of these cars will be hit in an accident within next 1 year. How many of these cars will be hit is not clear. But it is unlikely that all of them will be hit or none of them will be hit. Also it is not clear how much will be the repair cost when a car gets hit but it cannot be more than the original price of the car. To the […]

Some important terms of US Insurance Industry

Author - Ashish
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5:53 am
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Insurance industry of United Stated is very much different from any other country and also it is the largest market in terms of premium amount according to federal Insurance Office (2014) Report. Insurance industry of US is regulated by each state individually means it is a state based insurance regulatory system.

In general Insurance means “risk transfer”. Here we have two sides, one is insurer (the insurance Carrier) and another is insured (the person who is taking the insurance from insurer).

Synonyms of terms

Insurance Provider -> Insurer, insurance company or insurance Carrier
Insurance Buyer -> Insured or policyholder

Normally we choose […]

Insurance Agency Management System – Direct versus Agency Billing

Author - Webner
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6:29 am
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0 Comments
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Basics first – Client is the insured person or who gets himself, his property or vehicle insured by the insurance company. Insurance company is also known as Insurance Carrier or insurer. And there is insurance agency that acts as interface between Client and Carrier to make it easy for Client to understand policy details and to bring more clients to the Carrier for which insurance agency gets commission.

The client who gets insured, will get billed for the policy premium. Who collects the premium from Client (Agency or Carrier) and it goes into whose bank account?
The answer to this question […]

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