INSURANCE

How insurance works  What is insurance?  Why do people and businesses purchase insurance cover?  What does a person or a business have to do if they want to purchase insurance?  Do you know how the insurance business works?  Read the text on p. 65 / RB

WHO IS WHO IN INSURANCE 1. The insured 2. Insurer 3. Agent 4. Broker 5. Underwriter 6. Loss adjuster a) Estimates the risks / premiums b) Covered by insurance c) Independent person / company decides if claims are valid and how much to pay for compensation d) Employed by one insurer (commission) e) Gives insurance cover f) Independent, works for a number of insurers

 Key  1b  2e  3d  4f  5a  6c

INSURANCE TERMS 1. Premium 2. Comprehensive 3. Compensation (indemnity) 4. Proposal form 5. Claim 6. Reinsurance a. Application by a person / company requesting insurance b. Insuring of risk by one insurance company with another c. Money for suffering damage, loss injury d. Monthly/yearly payment for a policy e. Request by a policyholder for compensation under the policy f. All-inclusive, complete protection

 1d  2f  3c  4a  5e  6b

 Do exerc. III, p. 65 in RB  Do exercise IV, p. 66 in RB

 RB  P. 66  Watch an fill in the gapped text and think about what kind of words and expressions might be missing.

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TYPES OF INSURANCE  G_ n_ _ al insurance  H _ _ s_ h_ ld insurance  M_ t _r insurance  Co_ pr_h_n_ _ve insurance  F_ _e insurance  Insurance a _ a_nst b_ r_la_y  A_c_d_nt insurance  L _ _ e assurance/insurance

TYPES OF INSURANCE  General insurance  Household insurance  Motor insurance  Comprehensive insurance  Fire insurance  Insurance against burglary  Accident insurance  Life assurance/insurance

How to take out insurance? Put the following steps in the chronological order: 1. The insurer qutoes a premium. 2. You find an insurance company and contact an agent or a broker. 3. The underwriting process (risk assessment) takes place. 4. You decide to protect your property against an accident, theft or damage. 5. The insured pays the first premium. 6. The insurer issues the policy (the contract). 7. The insurer is willing to provide cover. 8. You apply for insurance.

Steps in taking out an insurance: 1. You decide to insure something against an accident/ theft or damage. 2. You find an insurance company, contact an agent or a broker. 3. You apply for an insurance. 4. The underwriting process (risk assessment) takes place. 5. The insurer is willing to provide cover. 6. The insurer quotes a premium. 7. The insurer issues the policy (the contract). 8. The insured pays the first premium.

How do insurance companies make a profit? POOL OF PREMIUMS CLAIMS OVERHEADS INVESTMENTS INDUSTRY GOVERNMENTINDIVIDUALS PROFITS

Fill in the gaps with the help of the graph. Thousands of people pay ___________ to insurance companies, which use the money to pay ___________ to people who suffer loss or damage. A part of the money goes for ___________, fixed and variable costs. The rest of the pool of premiums can be _________in the form of lending to _________, __________, or __________ in order to earn _______. In this way insurance companies become large institutional investors that place great sums of money in various securities.

Thousands of people pay premiums to insurance companies, which use the money to pay claims to people who suffer loss or damage. A part of the money goes for overheads: operating expenses. The rest of the pool of premiums can be invested in the form of lending to industry, government or individuals in order to earn profits. In this way insurance companies become large institutional investors that place great sums of money in various securities.