Hi Two questions. Suretyship - guarantees financial commitments of insured. So two examples might be creditor cover for personal loans credit cards mortgages. And cover for coupons and redemption payments if a bond issuer? Personal accident limited underwriting for group policies. Rates here may be by age sex type of work. But is there more detailed underwriting of individual contracts? E.g. Health checks required? Of am I getting my products confused? Leela
Surety can be construction bonds too, no? As for the PA bit, I suspect it means we cannot simply underwrite each individual insured in a group PA policy as opposed to individual PA. Example, your employer purchases a group PA for its employees, but the insurer cannot possibly consider the health and risks of every individual employee prior to issuing the policy.
Thanks for the reply Jensen. I realise underwriting on a group pa policy is necessarily limited. I was just unsure what level of underwriting is actually done on individual pa policies. I guess it's probably related to the size of sum insured.
I'm guessing: Age of insured person Existing conditions Involvement in risky activities / sports Frequent traveller Occupation History of illnesses Gender Open to corrections!
I'm not quite sure whether you really mean 'level of underwriting' or whether you're after the rating factors. But either way, it depends on what's being covered by the PA policy. For example, if it is literally just accidents, then these are very rare, and claims are pretty much random and so do not depend on the policyholder that much. I just pretended to apply for a policy online with a major provider, and I was quoted a price regardless of any of my details at all - all they asked was the number of people to be covered (me, me plus spouse, whole family etc). The sum insured (which varies by the limb) was fixed so there was no option to 'choose' my cover - which I agree would have an effect on the price. See p42 of the Products Appendix in the Course Notes. This gives you a few other possible rating factors too.
