Insurance Market And Operators
Overview
Buying insurance can feel like dealing with one faceless company, but behind every motor cover note or fire policy stands a whole marketplace of specialists. Some sell risk, some carry it, some carry the carriers, and a quiet crowd of experts prices, inspects and settles it. Knowing who is who is the difference between a candidate who guesses and one who understands how a Nigerian risk actually gets placed.
In this lesson you will map the insurance market from the buyer at the bottom to the reinsurer at the top, learn the roles of insurers, reinsurers, brokers and agents, and meet the supporting operators such as loss adjusters, actuaries and surveyors. Above all you will settle the one distinction examiners test almost every year: a broker acts for the insured, while an agent acts for the insurer.
Objectives
- Describe the structure of the insurance market and identify its operators
- Distinguish the sellers of insurance from the buyers
- Explain the roles of insurers, re-insurers, brokers and agents
- Describe the supporting services in the market, including loss adjusters, actuaries and surveyors
- Explain how the parts of the market work together to place a risk
Mind map
This topic is mapped out so you can see how the ideas connect.
Flashcards
Quick recall practice on the facts this topic is tested on.
Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Insurance Market And Operators. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- In the insurance market, an insurance broker acts as the agent of the: A. Insurer B. Insured C. Reinsurer D. Regulator Answer: B
- Which of the following best describes a reinsurer? A. A broker who deals only in large risks B. A company that insures members of the public directly C. A company that accepts risk ceded to it by an insurer D. A government body that regulates insurers Answer: C
- A large factory fire claim is to be investigated on behalf of the insurance company. The operator appointed is a: A. Loss assessor B. Loss adjuster C. Surveyor D. Actuary Answer: B
- An insurer can retain 40,000,000 naira on a risk and reinsures the balance of a 100,000,000 naira cover. If the reinsurer bears the same proportion of any loss as of the risk, its share of a 50,000,000 naira loss is: A. 20,000,000 naira B. 30,000,000 naira C. 40,000,000 naira D. 50,000,000 naira Answer: B
- Which supporting operator uses statistics and probability to calculate premiums and reserves? A. Surveyor B. Loss adjuster C. Actuary D. Broker Answer: C
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Recommended Books
Revision Questions
Wondering what past questions for this topic looks like? Here are a number of questions about Insurance Market And Operators from previous years
Question 1 Report
Explain the following terms as used in insurance.
(a) re-insurance
(b) Loss adjusters
(c) underwriters
(d) brokers
(e) assessor
Answer Details
Meaning of the terms as used in insurance:
- Re-insurance: This is an arrangement whereby an insurance company transfers part of the risk it has accepted to another insurance company. It helps to spread risks and protects the insurer from very large losses.
- Loss adjusters: These are claims specialists appointed by insurance companies to investigate losses, determine the cause and extent of damage, establish whether the insurer is liable and recommend the amount payable as compensation.
- Underwriters: These are individuals or companies that assess risks proposed for insurance. They decide whether to accept or reject the risk and, where accepted, determine the premium, terms and conditions of the policy.
- Brokers: These are independent insurance intermediaries who act mainly on behalf of the insured. They advise clients on suitable insurance policies, obtain cover from insurance companies and assist clients in placing and negotiating claims.
- Assessor: This is a person who examines insured property or damage to it in order to estimate its value or the extent of loss. The assessor helps in determining the amount of compensation or claim due to the insured.
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