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Foundations of Casualty Actuarial Science

Acquisition Cost
The cost of selling insurance; normally the agent’s and broker’s
commission; any cost of putting the business on the books.

Actuary
A social mathematician who uses mathematical skills to define,
analyze and solve complex business and social problems
involving insurance; the work of actuaries involves the various
contingencies which face human beings and the financial effects
which such contingencies have on various insurance programs;
many of these programs involve long-range financial obligations,
for which actuarial forecasts are fundamental in maintaining a
sound financial basis - rate-making, premium and loss reserving,
investment valuation, pension benefits, and insurance statistics,
among others.

Adverse Selection
The conscious and deliberate selection of risks, segments of risk,
or coverages that appear less attractive, with a higher chance of
loss, than that contemplated by the applicable rate; the selection
of such risks is adverse because the rate is inadequate; a
tendency towards insuring risks possessing negative
characteristics.

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