Lapse ratio (how many people didn't keep their policy).
Insurer-Producer relationships.
State insurance dept stats.
Consumer reports.
Meeting legal requirements - answer✔Limit criminal, civil, and regulatory actions taken against
company.
Market conduct oversight.
Financial ratings like A.M. Best, function like regulator as industry watchdog.
Meeting social responsibilities - answer✔Satisfy customers, employees, investors, and the
community.
Functional View of insurance - answer✔Core functions:
Marketing and distribution (need risk from marketing/sales).
Underwriting (who gets in risk pool is determined here).
Claims (reason for being in business is to pay claims).
Supporting functions:
Risk control.
Premium auditing.
Actuarial.
Other (Reinsurance, info tech, investments, accounting/finance, customer service, legal and
compliance, HR, Special investigation units).
Key Takeaway:
While insurers vary their structure and exact role of each functional area, the interaction of
core functions and supporting functions is vital to their survival and success.
The Digitalization (Disruption) of Insurance - answer✔3 fundamental building blocks:
Data capture (IoT).
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