company | Insurance Software development

Why do insurance companies fail?

Author - Webner
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6:07 am
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Introduction

Insurance is the “promise” that insurers make to policyholders in exchange for premiums. The insurance industry is built on policyholder’s confidence that insurance contracts will be fulfilled and eligible claims paid. For consumers, the purchase of insurance is a key component of how they manage their financial risk. Consumer confidence in the industry is, therefore, insurance is closely linked to confidence in the solvency of their financial institutions.

Insolvency arises when insufficient assets and capital are in place to cover the claims liabilities incurred. Insurer liquidation shows claimers and policyholders to the risk of unexpected financial […]

Classification of Insurance Companies

Author - Webner
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6:26 am
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Insurance Companies

An insurance company is defined as an organization that provides financial protection and reimbursement of damages to an insured person or an organization according to the policy agreement. These companies provide insurance by collecting premiums from policyholders and ensure those policyholders to cover the losses if they suffer during the policy period. Because of the nature of their policies, an insurance company must perform common functions that are unique in providing its services, underwriting, loss adjustment, and investment.

Insurance companies may be classified in different ways: according to the type of insurance that they sell, their […]

How casualty companies calculate surplus & reserves?

Author - Webner
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5:00 am
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Introduction

Surplus and reserves are integral for any insurance company to run smoothly. There are plenty of ways in which an insurance company makes profits. Of which, premiums and investment are largely the biggest contributors. This is what makes them profitable in the long run and their business sustainable. In the following paragraphs, we will discuss the difference between a Casualty and non-Casualty insurance company, what is surplus and reserves and how do casualty companies calculate these measures?

What is a Casualty Company?

The present insurance industry is said to be divided into 2 major […]

How does an insurance company calculate profits?

Author - Webner
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5:43 am
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Introduction

Every business works with the intent of making a profit. The success of every business depends on its ability to constantly earn profits. Profit, in business usage, is the excess of total revenue over total cost during a certain period of time. Profit is equal to a company’s revenues minus expenses. For insurance companies, annually profit margins represent yearly profitability averages. These margins measure how well a particular business company does, over a period of time. From the perspective of insurance companies, profit margins are an important part of tracking the internal performance of the company […]

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