Insurance; Chapter 1- Key Points

Chapter 1: The Insurance Market (Key Points)

Operation and Structure of the Insurance Market; 

• The insurance market is made up of buyers, intermediaries and sellers. 

Lloyds;

• Lloyd's is not an insurer but an organisation providing facilities for the placing of risks in it's own market.
• The risks are carried by the syndicates, who appoint managing agents who in turn employ underwriters to accept risks on the syndicate's behalf. 

Distribution Channels;

Distribution of insurance products can either be:

• Direct, for example, the insurer's employees see the products.
• Indirect, for example intermediaries are paid by the insurer to promote products on their behalf.

Intermediaries;

• The financial Conduct Authority (FCA) is the regulator for insurance intermediaries and financial advisory firms. All intermediaries who carry out such activities must be either directly regulated by the FCA or exempt. 
• An intermediary can choose to be either;

- Regulated directly, for example to be an authorised person

- Or they can be exempt, for example an appointed representative or introducer appointed representative.

• The services that intermediaries provide for their clients vary and depend on what sort of intermediary they are, for example whether they are an independent intermediary or an appointed representative. They will also provide services for insurers. 

Underwriters, Claims Staff, Loss Adjusters and Loss Assessors;

• An underwriter assesses the risk brought to the pool and decides whether to accept it and on what terms.
• The role of claims personnel is to deal quickly, fairly and cost effectively with all the claims and to distinguish between real and fraudulent claims. 
• A loss adjustor is an independent expert in dealing with insurance claims and is appointed by the insurer, whereas a loss assessor is also an expert but is appointed by the insurerd. 

Call Centres;

• A call centre is a location where the vast majority of incoming calls are handled for an insurer. Call centres may be outsourced to contractors.

Additional Services;

• Additional services that are not directly concerned with the provision of insurance cover include;

- Helplines and advice

- Authorised repairers and suppliers

- Risk control and advice

- Uninsurerd loss recovery 

- Third party administrators