MTHEL131 Lecture Notes - Manulife, Trust Company, The Great-West Life Assurance Company
11 May 2013
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2 forms an insurance company can take: Owned by share holders (individuals who purchase the stokes/shares of the company) Advantage: ability to issue shares to raise capital (11477) Disadvantage: run the risk that company of being taken over. If one person owns more than 50%, he could win vote; has power to elect board member that he wants. Doesn"t have any stock, no share holders. Owned by policy holders (by participating policy holders) the individuals who bought the policy. Advantage: no worry of being taken over. 3 key factors that insurers must take into when setting the prices (of policy/premiums) All three of them are estimated, they are projections. Reserve: in what the fund in reserve will pay for the future claim. Having a new policy xyz, in the end of the year, if the project investment returns is. 4, but actually is 5 favorable; if fewer people died favorable; expenses higher than we thought unfavorable.
