34. property/casualty (P&C) insurance company insurers that issue and sell insurance policies that cover property damage and liability risks
35. pure risk no possibility of a gain. either loss or no loss occurs
36. reinsurance insurance that an insurance company purchases from another insurance company to transfer all of part of the risk on insurance policies
37. reinsurer AKA assuming company, this is the insurance company that INSURES the other in the case of reinsurance
38. risk the possibility of an unexpected result, either a gain or a loss
39. risk class a grouping of insureds who represent a similar level of risk to the insurer
40. risk management individuals and businesses identify and assess the risks they face and take measures to eliminate or reduce their exposure to those risks
41. speculative risk result can be loss, gain, or no change
42. standard premium rate the premium rates those deemed to be a standard risk are charged. usually life insurance policies are this
43. standard risk proposed insureds with a likelihood of loss not significantly greater than average
44. substandard premium rate higher rate charged to those deemed to be a substandard risk
45. substandard risk AKA special class risks, proposed insureds who have a significantly greater than average likelihood of loss but are still insurable
46. techniques to manage financial risk avoid
control: reducing, like exercising to control disease risk, or installing sprinklers
transfer: like buying insurance
accept
47. third-party policy a policy purchased by one person or business on the life of another person
48. two primary stages of underwriting identifying the risks that a proposed insured presents, and classifying the degree of risk that a proposed insured represents
49. types of risk that can be covered by insurance personal risk, property damage risk, and liability risk
50. underwriter insurance company employees who are responsible for evaluating proposed risks