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operating cost and higher claim cost due to fraud and

abuse in insurance.

 There are certain people who mystify the insurance plans

for their self-interest by claiming false claims from

insurance companies.

 It is prone to fraud as it is a contract of utmost good faith.

Stakeholders in insurance:

- Policyholders: that the product is of good value (premiums

vs risk transfer) and premium is affordable, that the cover

required is available (think homes on flood prone areas)

and the ability of the company to pay claims when they

arise

- Insurer/ Shareholders/ Investors: As starting and running

an insurance company has huge costs; their return on

Equity, solvency of the company

- Insurance Regulator: ensuring solvency of the company,

policyholders are protected at all times and treated fairly,

that company pays any levies due and all just claims.

- Management: profitability of the company/ line of

business, business planning, no over/under reserving,

adequate pricing of products

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