C16 Business of Insurance|questions and answers 2026

C16 Business of Insurance|questions and answers 2026
Seven potential effects of foreign ownership: -
✔✔1. Deployed capital: Many more choices for placement of capital
when international
2. Divesting certain lines
3. Cost of retrocession covers and reinsurance
4. Emerging risks
5. Setting underwriting philosophies and procedures
6. Technology
7. Investment markets
Three effects of Mergers - ✔✔• Reduce capacity from what is currently
an already tight market
• Give Insurance companies a slight smaller reinsurance universe from
which to glean capacity
• Give other insurers the opportunity to grow-albeit to a fairly small
degree
17. Three risks that insurers will face in mature or merging market: -
✔✔• Exposures to asbestos
• Large natural catastrophes
• Products liability
• Political risk
• Corporate scandales
• Environmental liability
• Terrorism
• Litigiousness5 Ways Insurance companies spread risk - ✔✔-Share risk
with other insurance companies (for very large risk, several insurers
subscribe to percentage of risk)
-Reinsure the risk
-deductible
-spread risk over diverse geographical region (soften risk of localized
disasters)
-form risk pools (syndicates of insurance and reinsurance companies,
organized to underwrite particular risk)

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