Page 200 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

acceptable sometimes in case of a class of
business that has an insignificant exposure to
catastrophic losses. One also accepts an insurer
taking credit on a conservative basis for any
investment income in classes of business such
as Motor Third party Liability on a proper and
statistically supported basis.

(ii) The margins that are built into the rates to cover
acquisition costs, promotional expenses,
management expenses, catastrophe reserve
and profit margin and the credit that is taken
for investment income in designing rates ,
terms and conditions of cover and are
modified based on actual operating ratio of
the insurer.

(iii) The delegation of authority to various level of
management for quoting rates and terms and for
underwriting each of the 5 subcategories of the
products.

In particular the board appoints the Appointed

Sashi Publications - www.sashipublications.com 213

Copyright@ The Insurance Times. 09883398055 / 09883380339