Q1. Is supervisory balance sheet is created by the company separately to show solvency capital which is otherwise not explicitly shown on the normal balance sheet ? Q2. pg 19 book question solution "the company price direct selling methods.................. or a simple single premium savings policy" kindly explain this ?? Q3. pg 25 section 3.13 last point "non life insurance companies, banks ,buildings...................... compete with the life insurance market" my question is how non life insurance companies compete whether Life insurer in some way ?
Hi Sagar Q1 Insurance companies may produce many different balance sheets for different purposes. The main ones would be for the annual published accounts and for the solvency regulator. But they may also produce balance sheets for internal management purposes too. The contents of the balance sheet and the assumptions used will vary depending o the purpose and the rules of the country. Q2. In this question the policyholder has just died and their next of kin has just received a lump sum death benefit. The solution then suggests that the insurer might contact the next of kin directly to sell them a policy that might be purchased with the lump sum. The next of kin might want to save the lump sum in a savings contract or buy an annuity to provide income. Q3. I'll return to this later. Giving a tutorial now. Best wishes Mark
Q3. One possible answer is that non-life insurers offer personal accident cover that provides a lump sum if a policyholder is injured in an accident. This competes to some extent (but it's certainly not a perfect match) with term assurances and critical illness contracts provided by life insurers. Best wishes Mark
