Fire and Consequential Loss Insurance - IC 57 Exam Study Notes

The term 'underwriting' is broadly used to denote the principles and practices concerning: i. The acceptance or rejection of the risks, ii. The fixing of rates, iii. The total amount of acceptance, iv. The amount of retention for insurers own account and v. Treatment of the balance through reinsurance
Several factors enter into underwriting and these may be broadly classified as follows: i. The production of a well spread and a large volume of business; ii. The selection of the business; iii. The determination of the limits to be retained; and iv. The reinsurance of the surplus
The production of a large volume of business is governed by the need for wide distribution of risks class-wise and geographically.
The selection of the business involves careful scrutiny of the business acceptances with a view to making a proper assessment of the fire hazards involved.
The individual features in the risks which affect limits may be considered as follows: i. Construction and occupancy, ii. The probable effects of any outbreak of fire on the stocks and the possibilities of salvage, iii. Fire protection, iv. The situation of the risk

Important Points for IC 57 - Fire and Consequential Loss Insurance Exam