BeNew Insurance

Risk Pooling Risk pooling simply means sharing the potential costs of risks among a large group of individuals or entities. By combining everyone's resources, the financial burden associated with any individual experiencing a loss becomes smaller and more manageable. This principle forms the foundation of all insurance models. There are basically two types of Risk Pooling: A. Formal insurance: Offered by companies, where individuals pay premiums and receive specific coverage in case of certain events. B. Informal risk-sharing arrangements: Groups like communities or families may create their own systems for mutual aid and support in times of need. When considering rusk pooling we understand individuals with a higher risk of making claims might be more likely to join the pool, which gives rise to the principle of moral hazard making the insurance more riskier. This is why a good mechanism must be put in place to ensure contribution and distribution of resources within the poo...

Joint Vs Composite Insurance Both joint insurance and composite insurance involve insuring multiple interests under one policy, but they have distinct characteristics and cater to different needs. Here's a breakdown of the key differences: Joint insurance exists where two or more parties with individual interests in the same property take out a single insurance policy. A typical example is a husband and wife jointly insuring their home. Joint Insurancce = Equal ownership and interest. Whereas composite insurance exists where two or more persons with a separate interest in the subject matter of the insurance, are insured parties in the same insurance contract. A typical example would be a mortgagor and a property owner or a contractor and sub-contractor." Composite Insurance = Distinct and separate interests The appropriate choice between joint and composite insurance depends on your specific situation: -For personal assets like jointly owned houses or vehicles, joint ...

Inland Marine Insurance Inland marine insurance (IMI) is a specialized type of insurance that protects movable property and equipment while it is being transported on land within a country's borders. It's important to note that it differs from traditional property insurance as it covers property in transit, while property insurance covers property at a fixed location. IMI covers specialized high-value assets that property insurance typically doesn’t cover. Inland marine insurance covers losses to five types of business property: 1-Property that is moving over land between locations (e.g., construction equipment) 2-Property that you keep at an off-site warehouse or facility (e.g., vending machines stored at a customer’s site) 3-Property that is stored in a moving vehicle (e.g., a food truck) 4-Property that is part of infrastructure (e.g., bridges, communication towers that an insured owns) 5-High-value property stored at your fixed location (e.g., another person's artw...

Experience Refund An experience refund in insurance refers to a portion of the premiums paid by a policyholder that is returned to them if the insurer's experience with the policy is better than expected. In other words, if the insured individual or business exhibits lower-than-average claims activity or generates higher-than-average profits (depending on the type of insurance), they may be eligible for a refund. Experience refunds can benefit both policyholders and insurers: For policyholders: They receive a financial reward for responsible behaviors or favorable circumstances, incentivizing risk mitigation and reducing claims. For Insurers: It fosters stronger relationships with policyholders by demonstrating fairness and transparency in premium allocation. There are three main types of experience refunds: 1. Policyholder Level: This type of refund is credited directly to the policyholder's account at the end of the policy period. It's typically offered with individ...

Verification Insurance verification is the process of confirming the validity and accuracy of the information provided by an insured individual or business. It's a crucial step for insurers to assess risk accurately and ensure they can fulfill their obligations under the policy. There are different types of verification in insurance, each focusing on specific aspects of the policy: 1. Eligibility verification: This confirms whether the applicant meets the criteria to be insured under the specific policy. It involves checking factors like age, location, health, property ownership, and occupation. 2. Coverage verification: This ensures the policy covers the specific risks and perils the insured wants protection against. It involves reviewing the policy wording, exclusions, and limitations. 3. Premium verification: This confirms the accuracy of the calculated premium based on the verified risks and coverage. It involves reviewing factors like deductibles, co-pays, and payment ...

Index-Based Or Parametric Insurance Index-based insurance, also known as parametric insurance, is a relatively new and innovative approach to providing financial protection against risks, particularly in agriculture and disaster-prone areas. Unlike traditional indemnity insurance that relies on claims assessments after an event, index-based insurance uses predetermined indices to determine payouts, making the process faster, more objective, and often more affordable. Index-based insurance is highly applicable in areas such as: 1) Agriculture: Protecting farmers against losses due to drought, excessive rainfall, or other weather events. 2) Disaster relief: Providing rapid financial assistance to communities affected by earthquakes, floods, or other natural disasters. 3) Livestock insurance: Protecting against livestock mortality or morbidity due to disease or weather. Here index base insurance works: -Index development: A relevant index is chosen to reflect the risk being insure...

MATERIAL MISREPRESENTATION Material misrepresentation in insurance occurs when an insured person makes a false or misleading statement about a significant fact on their insurance application or during the claims process. This can lead to the insurer denying coverage or cancelling the policy. For instance, the policyholder provides false information regarding the location of the insured property. Material misrepresentation may be: A) Intentional misrepresentation: This occurs when the insured person deliberately makes a false or misleading statement. For example, someone might intentionally lie about their driving history on an auto insurance application in order to get a lower rate. B) Unintentional misrepresentation: This occurs when the insured person makes a mistake or forgets to disclose something important. For example, someone might forget to mention a previous health condition on a life insurance application. For a misrepresentation to be considered material, it must mee...

Risk Exposure Risk exposure is the possibility of financial loss based on the probability of an event occurring.refers to an individual, organization, or asset arising from uncertain events. It's essentially the vulnerability to harm or loss that arises from exposure to threats or hazards. Some examples of risk exposure in different contexts: Individuals: An individual's risk exposure might include the risk of losing their job, getting sick, or being involved in an accident. Businesses: A business's risk exposure might include the risk of losing customers, experiencing a data breach, or being sued. Governments: A government's risk exposure might include the risk of natural disasters, cyberattacks, or terrorist attacks. Key components of risk exposure: Threats: These are potential events that could cause harm or loss. Examples include natural disasters, accidents, cyberattacks, financial market downturns, legal liabilities, and more. Hazards: These are specific...

Composite Insurer A composite insurer is a company that offers a wide range of insurance products, including both life insurance and non-life insurance. This makes them one-stop shops for individuals and businesses seeking comprehensive coverage for a variety of risks. Benefits of using a composite insurer: Convenience: Having all your insurance needs under one roof can simplify your life and save you time and money. Potential for discounts: You may be eligible for discounts if you bundle multiple policies with the same insurer. Broader range of coverage options: Composite insurers typically offer a wider range of products than companies that specialize in only one type of insurance. Expert advice: Many composite insurers have experienced agents and brokers who can help you choose the right coverage for your needs. Things to consider when choosing a composite insurer: Reputation and financial strength: Make sure the insurer is reputable and has a strong financial track record...

Comprehensive Medical Expense Insurance An Insurance policy that provides coverage, in one policy, for basic hospital expense and major medical expense. This type of health insurance plan that offers broad coverage for a wide range of medical expenses, including: Hospitalization Surgery Physician visits Diagnostic tests Preventive care Prescription drugs Ambulance services And more.... In some jurisdictions, Comprehensive Health Insurance is used as a general term for health insurance plans that provide coverage for a wide range of services, The specific benefits and coverage details can vary depending on the country and the specific plan. Additional features to this insurance plan is that; Higher coverage limits: Comprehensive plans typically have higher annual and lifetime coverage limits compared to basic or limited benefit plans. Lower out-of-pocket costs: May have lower deductibles and coinsurance percentages, meaning you pay less out-of-pocket for covered services. Netw...

Run-off Run-off, also known as close-out insurance, is a specific type of coverage designed to protect businesses and individuals from potential liabilities arising after their main insurance policy has expired or been cancelled. So what is run-off exactly we will examine run-off in two different scenarios: The insured: This is a type of insurance that provides coverage for claims made after a policy has expired or been canceled. It's particularly important for claims-made policies, where coverage is triggered when a claim is filed, not when the incident causing the claim happened. This protects the insured from being liable for incidents that occurred during the policy period but weren't reported until after the policy ended. The insurer; Sometimes, an insurance company will decide to stop selling new policies and eventually close down. Run-off portfolio in this situation will refer to insurance policies or reinsurance contracts terminated but for which the Insurer or ...

Covariant Risk Covariant risk refers to the risk that multiple insured events will occur at the same time, or in close proximity to each other, and lead to a significantly higher than expected level of losses for the insurer. This can happen for a variety of reasons, such as: Natural disasters: A major earthquake or hurricane, for example, could damage or destroy a large number of insured properties in a short period of time. Pandemics: A global pandemic could lead to a surge in claims for health insurance, life insurance, and business interruption insurance. Economic downturns: A severe economic downturn could lead to an increase in unemployment, which could in turn lead to an increase in claims for property insurance and auto insurance. Covariant risk can be a major challenge for insurers, as it can lead to significant losses and even insolvency. To mitigate covariant risk, insurers use a variety of techniques, such as: Diversification: Insurers try to spread their risks ac...

Institutional Risk Risks faced by insurers as a consequence of offering insurance. For example, insurers risk experiencing losses on their portfolio if claims or administration costs exceed expectations or if premium revenues fall below expected levels. These risks are complex, interconnected, and potentially devastating, making them a major concern for insurance companies and regulators. Different types of institutional risks in insurance; -Strategic risk: Misalignment with evolving market trends, failure to adapt to changing customer needs, or pursuing unsustainable growth strategies. -Operational risk: System failures, fraud, human error, natural disasters, cyberattacks, and technology disruptions that can disrupt operations and impact financial stability. -Financial risk: Market fluctuations, interest rate changes, adverse claims experience, and mismanagement of investments can threaten an insurance company's solvency and ability to meet its obligations. -Reputational ris...

Asbestos A mineral fiber that can pollute air or water and cause cancer or asbestosis when inhaled. The Environmental Protection Agency (EPA) has banned or severely restricted its use in manufacturing and construction. Asbestosis is not a cancer. It is a chronic and progressive lung disease caused by inhaling asbestos fibres over a long period of time. It may take 5 to 20 years before symptoms develop. Liability arising out of asbestos related injuries is commonly excluded from coverage in umbrella policies and in some general liability policies. Asbestos Liability Insurance is critical to those who deal with asbestos either directly or indirectly. Unfortunately, it's not possible to identify whether your home contains asbestos on your own. If you are concerned about the presence of asbestos in your home, you will have to contact a professional to do an inspection. Possible locations of asbestos in your home include: Insulation, Paint, Around stoves, boilers, water heater...

Insurable Risk An insurable risk is an event that: Has a chance of happening, but is uncertain: It's not guaranteed to occur, but there's a measurable probability that it will. Can cause significant financial loss: The event would result in substantial financial burden if it happened. Can be pooled with other similar risks: By sharing the risk with a large group of individuals facing similar potential losses, the financial impact on each individual is reduced. Examples of insurable risks; Vehicle accidents, fire damage, illness or disability. The conditions that makes a risk insurable are: 1- The peril insured against must produce a definite loss not under the control of the insured. 2- There must be a large number of homogeneous exposures subject to the same perils. 3- The loss must be calculable and the cost of insuring it must be economically feasible 4- The peril must be unlikely to affect all insureds simultaneously. 5- The loss produced by a risk must be definite a...

Acquisition Cost Acquisition cost refers to the expenses an insurance company incurs to secure a new policy from a customer. These costs can involve a variety of activities and resources, and their impact on the company's profitability is significant. Acquisition costs mainly comprises Commissions: Payments made to agents or brokers for selling insurance policies. Marketing and advertising: Costs associated with promoting insurance products through various channels. Underwriting expenses: Costs of assessing and evaluating risks associated with potential policyholders. Policy issuance: Administrative costs associated with issuing and processing new policies. Technology and infrastructure: Costs of maintaining technology systems and resources required for sales and policy management. Understanding acquisition costs is crucial for both insurance companies and policyholders. Companies need to manage these costs effectively to remain competitive and profitable, while custome...

PROPERTY DAMAGE UNINSURED MOTORIST Uninsured/Underinsured Motorist Property Damage (UMPD/UIMPD) is a valuable type of car insurance coverage that protects your vehicle and other personal property if you're hit by a driver who does not have enough insurance (underinsured) or does not have any insurance at all (uninsured) to cover the damage they caused With this coverage, your own insurance company would pay up to the limit of your policy to have your car fixed or replaced. Who is this cover suitable for; -Drivers in areas with high rates of uninsured motorists. -Drivers with expensive cars. -Drivers who want peace of mind. UMPD/UIMPD will typically cover: Repair costs: Covers the cost of repairs to your car or other damaged property after an accident caused by an uninsured or underinsured driver. Replacement costs: If your car is totaled, UMPD/UIMPD can help cover the cost of replacing it with a comparable vehicle. Rental car expenses: May cover the cost of a rental car wh...

Accidental Death Benefits This is a benefits paid in case of death resulting from an accident. Since total benefit is usually doubled for accidental deaths it is common to say that a life insurance policy contains a "double indemnity provision". Sometimes, however, the cover is not integrated in the policy and is sold as a separate optional rider instead. ADB is an optional add-on benefit you can purchase alongside certain insurance policies, like life insurance or critical illness insurance. It provides a lump sum payment to your designated beneficiaries if you die due to an accidental cause within the coverage period. This can help your loved ones manage financial burdens and cope with the loss without facing immediate financial strain. Coverage details can vary depending on the specific policy and provider, but ADB typically covers accidental deaths caused by: -Vehicle accidents -Pedestrian accidents -Public transportation accidents -Drowning -Falls -Burns -Poisoning ...

Vehicle Accident Procedures The procedures involved in a vehicle accident can be stressful and confusing, but knowing the steps to take can streamline the process and ensure you protect your rights. In the first place , you must keep an emergency contact information in your car, take photos of your vehicle before any accidents occurs, familiarize yourself with your insurance policy and understand your coverage limits. To help you protect both yourself and your interests, we have provided some basic hints should you find yourself involved in an accident: 1-Call the police immediately, and if necessary, an ambulance 2-Check for injuries: Ensure everyone involved in the accident is safe and call emergency services if necessary 3-Do not admit liability or admit fault: Avoid discussing what caused the accident with anyone except for the police and your insurance company. 4-Document the scene: Record all details of the accident including the date, time, location, accident descripti...

Open Insurance This refers to a broader movement towards more open and transparent data sharing in the insurance industry. It aims to break down traditional silos and enable secure, standardized access to insurance data by authorized third-party providers. Open insurance, with its promise of increased transparency, competition, and innovation in the insurance industry, is witnessing exciting developments on a global scale. Open insurance can pave the way for: Innovation: New products and services can be developed using this data, potentially offering more personalized and affordable options for consumers. Competition: Increased access to data can foster competition, potentially leading to lower premiums and better coverage for consumers. Efficiency: Streamlined data sharing can improve operational efficiency for both insurers and consumers. Several initiatives and regulations are driving open insurance globally, including: Open Insurance API Platforms: These platforms allow a...

Loss Occurring The term loss occurring in insurance can have slightly different meanings depending on the context, but generally it refers to the timing of when a covered loss is considered to have happened for the purposes of claims and coverage. Here are two main areas where you might encounter loss occurring. 1- Reinsurance treaties: In reinsurance, a "loss occurring" treaty means that the reinsurer's responsibility for a claim begins when the event causing the loss actually happens, regardless of when the claim is reported to the insurance company or the reinsurer. This contrasts with "risk attaching" treaties, where the reinsurer's responsibility starts on a specific date, irrespective of when the loss event occurs. Loss occurring treaties are typically used for claims with long tails, meaning they can take a long time to develop and report, such as environmental or asbestos liability claims. This approach ensures that the reinsurer remains respon...

Complaint System Insurance companies handle complaints through various channels and mechanisms, designed to address customer concerns and ensure fair resolution this can be achieved through an internal resolution, escalation, external ombudsman, or regulatory authority. It is an important fraud prevention strategy, a complaint system is a mechanism to actively solicit customer complaints that bypass primary points of contact such as loans officers or insurance agents. Internal Resolution: First point of contact is usually the customer service department of the insurance company. You can contact them by phone, email, or online chat to discuss your issue. Often, concerns can be resolved at this initial stage through explanation, clarification, or adjustments. Escalation: If your issue remains unresolved through internal channels, you can escalate it to a supervisor or complaint handling department. They will investigate your complaint further and attempt to reach a satisfactory re...