RMI 3502 Lecture Notes - Lecture 1: Underwriting, Liquid Apogee Engine, Reinsurance
16 Oct 2016
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Stock insurance companies: most common in us. Goal is to make money: owned by stockholders, capital is raised by selling stock, can also issue debt- not as common. Llo(cid:455)d"s of lo(cid:374)do(cid:374: proprietary insurer, marketplace like a stock exchange, people i(cid:374) (cid:271)o(cid:454)es are referred to as u(cid:374)der(cid:449)riter or (cid:862)(cid:374)a(cid:373)e(cid:863) These are the people taking on the risk: origi(cid:374)all(cid:455) (cid:271)a(cid:272)ked (cid:271)(cid:455) i(cid:374)di(cid:448)idual (cid:373)e(cid:373)(cid:271)ers" fortu(cid:374)e. (cid:455)(cid:374)di(cid:272)ate is a (cid:272)olle(cid:272)tio(cid:374) of (cid:862)(cid:374)a(cid:373)es(cid:863) that delegate authorit(cid:455) to (cid:373)a(cid:374)ager: takes on unique risks. Satellite insurance, patent infringement: strong record of not defaulting (300+ years, (cid:1012)0"s/(cid:1013)0"s had so(cid:373)e trouble, recruit to dilute. Recruited more members: created company called equitas ( a holding company, new liability rules (limited liability) Mutual insurance company: cooperative insurer, owned by policyholders and formed to provide low cost policies to policyholders, excess profit after claims and reserve are returned as dividends. They are not taxed- viewed as a refund: ownership interest is not accumulated. Often the goal of the mutual insurer.
