What is an incurred but not reported (IBNR) reserve?

IBNR reserves are funds set aside for claims that have occurred but have not yet been reported to the insurer. These reserves account for the delay between when an incident happens and when the claim is filed, ensuring financial preparedness.

Is comprehensive coverage worth it for older vehicles or properties?

It depends on the asset's value. If repair costs exceed its worth, maintaining comprehensive coverage may not be cost-effective, and policyholders may opt for liability-only insurance instead.

How does SOA membership help with career advancement?

Membership provides access to exclusive job postings, professional development, leadership opportunities, and recognition in the actuarial profession.

How does risk mitigation impact insurance premiums?

Effective risk mitigation measures, such as installing security systems, fire prevention protocols, and workplace safety programs, can lower the likelihood of claims. As a result, insurers may offer lower premiums, discounts, or better policy terms to organizations and individuals with strong risk management practices.

How does business liability insurance protect against lawsuits?

It covers legal fees, settlements, and court judgments if a third party sues your business for negligence, bodily harm, or property damage claims.

What is an aggregate excess-of-loss treaty?

This treaty covers losses exceeding a predefined total amount across multiple policies within a specific period, usually a year.

What is the difference between indemnity and guarantee?

Indemnity compensates for actual financial losses incurred, while a guarantee is a promise that a third party will fulfill obligations if another party defaults. Indemnity is reactive (after loss), whereas a guarantee is proactive (preventing default).

What factors affect life insurance premium costs?

Age, health, lifestyle, occupation, policy type, coverage amount, and family medical history all influence the cost of life insurance premiums.