January 2012

Life Insurance
Insurance Life Insurance: the Basics Products Processes Distribution The market Compliance

January 2012

What is Insurance?

A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specific extent, the losses suffered by the insured

25/04/2012

Basically, Insurance is Gambling

Life Insurance gambles against death Car insurance against material and bodily injury Health Insurance against sickness Pensions and Annuities cover longevity

Lines of Business 1
General Insurance Life insurance & Pensions Health Financial and credit

Lines of Business 2
General Insurance Personal lines Commercial lines Engineering Casualty Marine and aviation

Lines of Business 3
General Insurance - personal lines:

Personal Auto Homeowners Personal Accident Travel All Risks Etc., etc.

Lines of Business 4
General Insurance - commercial lines:

Fire and allied perils Small business Engineering, Contractors, Electronic Commercial Auto Agriculture All risks Contractors Fidelity Marine, Aviation and Cargo Satellite Etc., etc.

Lines of Business 5
Casualty Workers Compensation Employers Liability Products Liability Professional Liability D&O

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Lines of Business 6
Health Insurance Health insurance Medicare Supplement (MedSupp) HIV Indemnity Long-Term Care Vision Insurance Dental Insurance

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January 2012

Commutation Functions
Commutation functions intent to simplify the life insurance calculations based on the values of qx, lx, i, v

Life Insurance Life Insurance is composed of :

Risk Savings Expenses Risk Coverage

Death Benefit Disability Retirement

Premium

Investment

Withdraws Agents & Brokers

Expenses

Salaries
...

L'assur Le payeur

Le souscripteur

Impt

Les autorits

Les Participants
Bancassurance Lintermdiaire

Le bnficiaire

Pledger

Le courtier Reassurance L'assureur

January 2012

More Than Just Life Insurance

Life Insurance is more than just Life Insurance:
Death Retirement Disability Permanent Invalidity Critical Illness

And in certain countries or companies:

Health Insurance

Assurances-vie pargne / Retraite

Monofonds Multisupports PERP

Sant Prvoyance Sociale

Assurance Dcs Obsques Accidents Assurance prt immobilier Incapacit temporaire de travail Invalidit permanente Maladie Assurance Dpendance

Life Insurance Whole life Endowment Universal Life Term insurance products Family income benefit Waiver-of-premium benefit Permanent total disability benefit Income replacement benefit Accident and sickness products Hospitalization products

Health Insurance Pension products

January 2012

Some Processes and Other Tasks

Customer Relationship Distribution Policy Administration Products Actuarial Work Surrender Values Lists Billing & Collection Placement, Investment, Accumulation and Revaluation Commissions Reserve Reinsurance Claims

Policy Administration

Quoting

New Business

Underwriting Policy Issue Endorsement

Surrender Values

Claims

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Underwriting Underwriting Automation Configurable Questionnaires LOB Life Health Disability Individual Case Scoring

Description

Product Management

Line of Business

Product Management

Type

Investment Type

Underwriting Category

Life Table

Version

Linkage

Actuarial Values

Algorithms

Billing and Collection

Billing
Billing Calculation Billing Report Premium Changes

Collection
Electronic Transaction Credit Card Cash Collection

Agents Reports

Delay Management

Account Statement

Monosupport Multisupport Valeur de Points Salaires Moyens Euro et Multisupport Participation aux Bnfices

Unit Link Daily Process

Transaction Daily Process
Sum Assured Calculation Savings Calculation Allocation Purchase Surrender Switch from Switch to Transfer from Transfer to Early Surrender Penalty

Investment Gateway

Investment

Return on Investment Calculation

Unit Share Value Calculation Accumulation Calculation Surrender Process

January 2012

January 2012

Life Insurance
Till 2001 Life Insurance was a conservative domain In the last years the industry has been changing almost every day

2001 The collapse of the stock market Bad business trying to expand during the bull-market years Enron, WorldCom EU, OECD, 9/11, etc regulations

Pensions crisis Life expectancy rose Falling birth rates

Regulatory Changes Gramm-Leach-Bliley Act Financial Responsibility, Privacy, Safeguard Transparency, Best Advice UK Pensions simplification-A-day Depolarization Riester Pensions Germany major changes in tax deductions in 2005 Sarbanes-Oxley HIPAA USA PATRIOT Act IFRS Solvency II