(a) Who is an actuary? (b) Differentiate between contribution and group insurance (c) Describe three types of risks that may be insured against under marine...

Answer Details

(a) Who is an actuary?

An actuary is a professional expert in insurance mathematics and statistics who calculates insurance risks and, using probability and mortality tables, determines the premiums that policyholders should pay so that the insurance fund remains solvent. The actuary assesses the likelihood of insured events occurring and fixes premiums high enough to cover expected claims, administrative costs and profit, yet competitive enough to attract policyholders.

(b) Difference between contribution and group insurance

(c) Three types of risks insured under marine insurance

• Marine perils of the sea: loss or damage to the ship or cargo caused by storms, heavy waves, collision, sinking or the vessel running aground.
• Fire: destruction of the ship or its cargo by fire while at sea or in port.
• Jettison and general average: the deliberate throwing overboard of cargo to lighten and save the ship; the loss so caused is shared by all parties to the voyage.

Other insurable marine risks include piracy and theft, and barratry (wrongful acts of the master or crew against the shipowner).