How does facultative reinsurance impact the insurer's solvency?

Facultative reinsurance helps insurers manage their risk exposure, ensuring that they do not take on more risk than they can handle. By transferring part of the risk to the reinsurer, insurers are better able to maintain their solvency, even in the event of large losses or claims.

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How does parametric insurance help in disaster recovery?

It provides rapid financial relief to affected individuals, businesses, and governments, enabling quicker rebuilding efforts and reducing the economic impact of catastrophic events.

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What is loss reserving in actuarial science?

Loss reserving estimates future claim payouts, ensuring insurers have sufficient funds to meet their obligations.

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How long does it take to get reimbursed for lost baggage claims?

Processing times vary, but most claims take 2-6 weeks. Providing complete documentation and proof of loss can speed up the process. Some insurers offer expedited claims for urgent cases.

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Are there any disadvantages to UBI?

Some disadvantages include potential privacy concerns, increased premiums for high-risk drivers, dependence on accurate data collection, and possible technical issues with tracking devices.

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How does moral hazard impact economic efficiency?

It leads to overuse of insured services, inefficient resource allocation, and higher costs for insurers and policyholders.

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How does adverse selection impact life insurance?

High-risk individuals, such as those with pre-existing health conditions or dangerous jobs, are more likely to buy life insurance. If insurers cannot accurately assess risks, they might increase premiums for all policyholders, discouraging low-risk individuals from enrolling.

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What is the role of IRDAI in market development?

IRDAI promotes the growth of the insurance sector by creating policies that encourage competition, innovation, and product diversification while ensuring that the market remains stable and healthy.

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