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4 Factual Determinants of Insurance Premiums

Without any shadow of doubt, insurance is an important mechanism that succors the individuals, states and the nation at large. You ought to or might have been maintaining one or more policies because of the peace of mind, confidence and security against financial losses that insurance proffered. Then, let me ask this question. Have you ever taken the pain of knowing the nitty-gritty of the premium you paid to the Underwriters annually, whether it’s reasonable or otherwise? The purpose of this article is to bring you to the limelight and be acquitted with the composition of the premium you paid.

Risk premium: Anyway, insurance is all about risk and in order to rate a risk appropriately the underwriter must know the degree of exposure of that property to a particular risk. So that portion of the premium that is allocated to the risk element of the cover is refers to as risk premium which accounted for about 50{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the total premium.

Expense loading: Based on the literary meaning of expenses. This is the apportionment that covers the expenses of the insurance companies like overhead, lighting and heating, rents, staff salaries etc. Conservatively, this will accounted for about 25{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the premium paid to the insurers.

Profit loading: Insurance like any other business operates on the principle of profit centre. To this end, they are in business to make an increasing profit on annual basis. Borne on this fact, the underwriter put this into consideration in charging their premium. The profit element is about 15{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the premium chargeable.

Contingency loading: As you are fully aware that the financial market is dizzy and highly volatile. And to make the situation worst, here come the issue of global economic meltdown that ravaged the whole world. Guess what, insurers behave like a seer (prophet) that is they subjected their businesses to reasonable foreseeability. That part of the premium that is used to cushion the effect of bad wealth or unfavourable business year(s) is referred to as contingency loading.

Here you are, ‘am sure you are no more a novice on factors that constitute the determination of office premium. Have a good day and see you again, your insurance intelligence is my concern.…

Return-On-Asset Ratio, Effects on the Loan Portfolio and the Investment Portfolio, and the FDIC

Low Return-on-Asset Ratio

It is always important for management to monitor all of the company’s finance, including income as well as expenses on a regular and frequent basis to make decisions on where to invest the company’s funds.

A low return on assets ratio indicates that unsuccessful or insufficient management of interest rate margin, noninterest income and expenses, and loan loss reserves is present. Banks have been focusing to receive a high portion of net income from noninterest income by providing other services, such as insurance or brokerage. Fees are another source of noninterest income for banks. When noninterest expenses (such as overhead or advertising expenses) exceed noninterest income however, then the return on assets declines.

A low return on asset can also be caused by high loan losses. This usually happens when banks offer loans to people who default on their payments, especially in times when economic conditions are less favorable. The net interest margin of a bank is impacted by many different factors including, but not limited to: interest income, non-interest income and expenses, loan loss reserves. Poor management regarding any or all of these factors result in a low net interest margin and low (if any) net income.

The relationship between the ROA and ROE

Return on assets and return on equity are both measures of a bank’s performance. As mentioned above, the return of assets for a bank is impacted by factors of interest income, non-interest income and expenses, loan loss reserves. Poor management regarding any or all of these factors result in a low net interest margin and low (if any) net income. The difference between the ROA and ROE of a bank is that return on equity depends on the return on assets and in addition depends on the financial leverage of a bank (which is multiplied by the bank’s return on assets to equal the return on equity). There is not a direct relationship between the ROA and ROE. While the ROA high, the ROE may be a lot lower and still decreasing.

Effect on the credit decision in the loan portfolio and the investment portfolio

Credit decisions in the investment portfolio from the stand point of an investor should be based on a bank’s return on assets to measure its performance, and also on its return on equity, which is closely related to the bank’s financial leverage. The lower a bank’s financial leverage, the higher the amount of money the bank simply holds in reserves and does not loan out to people or invest. As an investor, it is important to know that a bank holds enough money in reserves to pay out interest to its investors. The lower a bank’s return on assets the more risky it is to invest in any securities issued by that bank.

Credit decisions in the loan portfolio from the stand point of the bank should not be too conservative, meaning that the bank will only give out loans to people with a low risk of …

The Importance Of Adequate Insurance Cover To Small Businesses

One of the largest risks facing small business owners is a failure to ensure an adequate level of insurance cover for their company – this is particularly true of small businesses who may not quite have the resources to cope with the large financial losses which may be suffered as a result of ‘underinsurance’.

A UK study recently estimated that around 80{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of businesses may actually be underinsured, and this figure is only likely to rise given the unprecedented volume of new businesses which are forming by the day in the UK.

As commercial insurance can be a somewhat dry and complicated topic, it is often overlooked by business owners eager to focus their efforts on lead generation, sales, customer service and production.

This is an understandable, yet extremely dangerous view to take, particularly in the modern era.

Unfortunately, claiming that you were ‘unaware’ that you lacked the correct insurance cover will rarely stand up in a court of law, and you must therefore take the time to ensure you are knowledgeable of exactly what is included in your business insurance policy, and what has been omitted.

This needs to be undertaken on a regular basis.

Never take the risk of waiting for a major financial loss before inspecting your insurance cover – instead, analyze your business insurance carefully, and determine whether you currently hold the correct level of coverage, in relation to the risks that are present in your individual business or industry.

Underinsurance is quite a basic concept – it simply means that your insurance schedule is valued lower than the sum of your company’s total assets, and you risk receiving less money in compensation than you require to restore your business to any pre-loss standing it may have held.

The primary reason for inadequate coverage among business owners is complacency – the feeling that ‘it will never happen to me’. However, this is demonstrably untrue, and this school of thought has led to many closed businesses, and a vast amount of unemployed entrepreneurs.

As well as ensuring an adequate level of coverage, it is also important that you update your business insurance accurately, on a yearly basis at the minimum.

The assets of a business can increase or decrease in value on a regular basis, particularly during uncertain economic times, and it is vital that your insurance schedule reflects the health of your business as it currently stands, and not as it stood twelve months ago or longer.

Take the time to undertake a full evaluation of your assets on a yearly basis before renewing your business easily avoided.

Businesses can be inadequately covered for many reasons, but it is important that you immediately examine your current level of coverage, understand the risks involved by remaining underinsured, and make the necessary changes to your business insurance, to ensure you minimize the risks involved with potential underinsurance.

It is often common for businesses to be inadequately covered on any commercial insurance policy, but UK insurers claim that the …

Saving Money In the United States

Saving money is what every citizen in America claims to strive for. Our society, in this time of day is beyond bankruptcy. We have dug ourselves in a hole so deep that the walls would be difficult to find just to try and climb out of. Our deficit is so large that we owe China twice as much as our worth. Business owners are struggling to keep their doors open while large corporations keep prospering taking all the money from people and keeping it to themselves. Most corporate employees get paid minimum wage or just a bit more. So where is all this money disappearing to? Into the fat wallets of corporate owners and into accounts overseas. Instead of recognizing this, our friends, families and co-workers continue to use services of big corporations allowing them to profit. People do not comprehend that if they were to buy their clothes from local stores and shops they would bring revenue into family operated businesses which would allow those families to spend money on other local businesses. This was the trading mechanism society used hundreds of years ago to keep up with bills and survive. This would ultimately be a win for everyone since it would only be money transferring back and forth between ourselves as opposed to the big corporations that move their revenue elsewhere.

Another important method we need to bring to the table is overspending. The average American family acquires about $117,951 of debt which adds up to $2 trillion dollars statewide. It is extremely unusual that Americans are in debt than England earns a year. Why is this we ask ourselves? Is it because our mentality is to want everything that our neighbors have and more? Is it because we are selfish and greedy and will acquire any credit just to live a certain type of lifestyle that we cannot afford? Sadly, this is the honest truth and what lead us to spiral out of control as a country. Our government, along with ourselves, have failed to live within our means.

Here is another myth we live by: “if you pay your credit-card balance off every month, you get “free use” of their money. FALSE. The fact is, 78 percent of credit-card holders do NOT pay off their credit cards every month. Credit-card users spend 12 to 18 percent more when using credit instead of cash. It hurts to spend cash, so you spend less.”

We really need to reevaluate our spending habits and where exactly we spend them. Use a family owned coffee shop instead of the local Starbucks. Shop at the small local shops for attire as, opposed to shopping at the mall. Purchase your car insurance at a family owned agency, instead of getting ripped off by money hungry insurance companies. Most of all stop using your credit cards so much and live more conservatively. Our children are our future and we want to raise them with the correct ethics and morals.…

How to Properly Insure Your Concrete Pumps

The business of concrete pumping comes with many challenges, one of them is being adequately insured when something goes wrong. Many concrete pumping companies have pumps and assume they’re automatically insured under their general liability policy, unfortunately they are not.

Trailer concrete pumps should be insured under what is called an inland marine floater. This type of insurance policy provides comprehensive coverage for your pump, insuring it from perils such as theft, vandalism, and damage you may cause it in the event of a car accident. This is similar to the coverage you may have on your car.

Just like any other trailer, liability coverage is automatically extended from the vehicle to the trailer it’s towing. For example: If your trailer sideswipes another vehicle, your auto policy will provide liability coverage to repair the vehicle you damaged. Repairs will only be provided up to your policy limits. Keep in mind if the auto policy your truck has does not include business coverage the insurance company will most likely deny your claim. Make sure you have a proper commercial auto policy before you tow anything for business use.

What about concrete pumps you can drive, how are they insured? Because these type of pumps are self-propelled they would need to be insured under a standard commercial auto policy. Make sure to mention any custom equipment you have to your agent. Just like on any auto policy custom equipment should be stated as such and endorsed into the coverage limits. Custom equipment can include any aftermarket stereo systems, hose reels, ladder racks, etc.

Always provide the replacement cost you’d like if your pump is stolen and ask for it to be stated in your policy. This way you’ll be sure you have enough to replace the pump in the event of a loss. Some carriers provide the actual cash value for your pumps unless otherwise requested. This means you’ll get the replacement cost minus depreciation to compensate you on your pump. Actual cash value may not be enough for you to buy another pump if yours is damaged, this option is not recommended.

Always consult your insurance agent before making any final decisions on your insurance policy. Each concrete pump is different and may have specific needs. Keep these points in mind when shopping for your insurance policy and you’ll be well on your way to protecting your business in the event of a loss.…

Managed Care HMOs

Do not know what HMO stands for? Health maintenance organizations are managed care programs.

In terms of affordable health insurance, health maintenance organizations (HMO), which are managed care programs, assist people to stay in good health. At least that is the idea behind them.

Put another way, the philosophy of HMO insurance plans is that if a person stays healthy and maintains that health, they will prevent disease. The care provided by the HMO will help people stay well. Staying well means rising health care costs will be controlled.

When insurance plans like HMOs were first launched on the market, people who opted to buy affordable health insurance paid a fixed monthly premium that was prepaid. What those people got in exchange for affordable health insurance was access to health care offered by a certain network of providers that included clinics, hospitals and other medical care providers. This meant that despite people were getting affordable health insurance, they were restricted to using "only" the procedures, benefits and doctors, etc. That belonged to the network.

HMOs were initially implemented by the government in 1973 to get rid of individual insurance plans and offer affordable insurance to everyone who wanted it. When they first came out, companies were buying individual health plans for workers.

Over time it looked like the better deal would be to get businesses to buy subsidized low cost health plans for employees and not expensive individual ones. Seeing a great opportunity, insurance companies started pressuring doctors to join HMOs. Fact is, doctors were told if they did not join, the insurance companies would see to it that they'd take their patients away with cheaper health care through the HMO. The threat worked and many joined the HMO plan to save their practices.

The more things change, the more they do not always change for the better. What happened with HMOs is that every time a doctor renewed with them, the rules were changed and got stricter and stricter, mandated that they see more patients and get more services pre-approved. HMOs used to be the cat's pajamas, but by the end of the 1980s and with a stack of unpaid and denied claims, people began to leave HMOs in droves.

The interesting thing here is that denied claims were denied because of bad investments the insurance companies made, not because of the claims themselves. The insurance companies invested in real estate, and when the boom went bust they could not cover HMO claims. Unfortunately over time it became an almost "ritual" for HMOs to deny claims. So much so, that today it seems to be a part of the way they do business.

Thankfully, a new breed of attorneys has begun chasing HMOs for those denied claims; Claims that include medical malpractice (med mal), bad faith and even wrongful death. In a nutshell, this boils down to the HMO may be sued if an individual dies due to the HMO denying cover for necessary medical treatment; For denouncing valid …

The History of HMO Plans

Introduction:

Health Maintenance Organization Plans – HMO Plans for short – are a type of managed care program. The idea behind managed care programs is that maintaining good health will be achieved by preventing disease and providing quality care. By maintaining good health, it is believed that escalating health care costs can be controlled.

When HMO Plans were first introduced, members paid a fixed, prepaid monthly premium in exchange for health care from a contracted network of providers. The contracted network of providers includes hospitals, clinics and health care providers that have signed a contract with the HMO. In this sense, HMOs are the most restrictive form of managed care plans because they restrict the procedures, providers and benefits by requiring that the members use these providers and no others.

History:

HMOs were intended to take health care in a new direction. They were designed by the government to do away with individual health insurance plans and to make affordable health insurance available to everyone. At that time employers were purchasing individual health insurance plans for their employees ~ a costly expense that many were starting to forego.

The Health Maintenance Organization (HMO) Act was approved by President Nixon in 1973. The managed health care plans were subsidized by the government and the new HMO-type systems began to grow, typically organized by businesses and community groups eager to make health care available to their workers and members at costs they could better afford. This subsidy created deals from the insurance companies to lure these businesses to buy these new discounted low cost health plans for their employees instead of the costly individual health plans.

Feeling the power of the government behind them and the frantic desire of employers to enroll their employees in these new HMO Plans, insurance companies began to apply pressure to doctors to join an HMO. Doctors were told that if they didn’t join, the insurance company would find doctors who would join and they would effectively take all their patients away.  Thus, doctors ended up joining an HMO so they would not lose their patients and subsequently their entire practice. 

As time went on, the Insurance companies added more and more rules each time the doctor’s contract was renewed. The popularity of the HMO Plans meant that the majority of their patients had HMO plans so they accepted the new conditions.  New terms included seeing more patients, more stringent confidentiality agreements, and more services requiring pre-approvals.

Up until the 1980’s most members agreed that HMO’s were a great health plan. However, by the end of that decade, faced with mounting numbers of denied claims, members began to sour on the HMO Plans.

What led to the increase of denied claims? It wasn’t a result of the claims themselves; it was a result of bad investments by the insurance companies.

During the real estate boom, the insurance companies thought it would be a good idea to invest in real estate deals.  Unfortunately, when the savings and loan …

Personal Injury Calculator – Top 5 Questions For Calculating Your Car Accident Claims

Using a personal injury calculator can help you figure out how much your car accident claims are worth. Here are the top 5 questions people ask about calculating the value of their auto insurance settlement.

1. How Does the Personal Injury Calculator Determine my Car Accident Claim?

The most basic formula that is known to be used for car accident injury claims is:

Pain Multiplier X Medical Expenses + Loss of Income

The “pain multiplier” is a number typically between 1.5 and 5. This multiplier number is chosen based on the severity of your car accident injuries; the more serious your injuries, the larger the multiplier.

For example, a minor injury like a sprained neck is more likely to get a low multiplier (1.5-3). While a more serious and painful injury, like a broken leg, would get a higher multiplier (3-5). The multiplier range may even go to higher figures (10) for more severe and long term injuries.

The next thing that is included in the claims formula is your medical expenses, also known as “special damages.” These expenses include the cost of your medical treatments, visits to the hospital, ambulance ride, X-Rays, pain medication etc.

The final thing that is added in your insurance settlement is your loss of income. This refers to the amount of income you lost as a result of your injuries. For example, if your injuries forced you to stay home from work, then your lost income would equal your daily pay rate times the number of work days you missed.

2. When Should You Use a Personal Injury Calculator?

The best time to use the injury calculator is at the end of your medical treatment. You should always have your injuries thoroughly diagnosed and examined before filing an injury claim. This gives you a more accurate estimate of your total medical expenses that should be included in your final settlement.

3. Who Should NOT Use the Personal Injury Calculator?

Most personal injury claims involve minor injuries that do not require you to immediately hire an expensive lawyer. For these types of claims, you should use the injury calculator to get a rough estimate of what your auto accident settlement might be worth.

However, there are insurance claims which cannot be handled without the help of a skilled injury lawyer. These types of car accident claims involve more serious and long term injuries like permanent disabilities, lost or severed limbs, traumatic head injuries etc. If you were severely injured, your best option is to meet with a lawyer who is familiar with claims related to your specific injuries.

4. How Accurate is the Personal Injury Calculator?

The injury calculator does not give you the exact final settlement, but an initial estimate of how much your injuries are worth to the insurance companies.

Many people would argue that the injury calculator is too simplistic. That it does not address the complexities and subtleties of an individual’s personal injury claim. Others are quick to bring up Colossus, …

Credit Repair Business Plan

Here's the executive summary of a Credit Repair Business Plan:

  • A description of your company, including your products and / or services
  • Your mission statement
  • Your business's management
  • The market and your customer
  • Marketing and sales
  • Your competition
  • Your business's operations
  • Financial projections and plans

For someone looking for a credit repair business plan, a simple description may be "Ace Credit restoration provides credit restoration services to help consumers attain good credit and therefore have more attractive financing options. Charging $ 800 to $ 2000 per client and reaches new clients via relationships by credit-dependent professionals (real estate, car dealers, etc.), financial professionals (tax, insurance, financal planners), consumer direct marketing (internet, radio, tv, postcards ), And past-client referral cultivation.

Any business plan should then talk about management, which indicates to your experience. If you have experience managing a team, attention to detail, and / or financial experience, this is relevant and should be included.

When writing about your client, the consumer, you'll find there are about 70 to 80 million americans with bad credit, many millions of whatever will need to finance a home or car or other purchase and will there be interested in purchasing credit repair services . While some people do attempt credit repair on their own, credit is becoming increasingly complex and important. Fewer people succeed or event attempt it, and like dealing with plumbing or auto repairs, most are willing to pay a professional to get it done right.

Next, you should include a specific marketing breakdown. We have found that at first, referral relationships are a great place to start. By offering "credit repair seminars" or "lunch and learn" events to local real estate agents or car dealers, you can quickly position yourself as an expert, develop referral sources, and help them sell more homes or cars. As your business grows, you'll want to branch out into mass media, internet marketing to increase your visibility and scale up your operations.

The next section generally will cover competition, which of course varies by market. Currently, the credit repair business is still open and large driven on referrals at time of need, meaning people often get their credit restored when preparing to buy a home or car, or after being declined for some type of financing (ie a credit card at Better terms than they have previously). Longer term, the internet is a massive source of business that still has fundamental opportunity. One still large untapped area requiring someone to execute their credit repair business plan is in the area of ​​social marketing (ie Facebook) and joint ventures with point-of-need media ie a referral relationship with leading real estate websites, car dealer websites, etc . Who depend on attractive financing.

Next, your plan should cover operations. You can run a credit repair home based business, or you can use office space. One under-used idea is renting a desk inside a busy real estate office. This can provide more than just a professional meeting place, but the …

Calculate Pain And Suffering The Right Way And Settle Your Car Accident

How to calculate pain and suffering? This is a difficult and controversial issue. When you are in a car accident, the insurance company wants to get a written document that releases any and all claims against the person that caused your damages and injuries. To get that release, the insurance

adjuster must compensate you adequately.

You are entitled to special damages (medical bills, wage loss, medicine, etc.) and general damages (pain and suffering, loss of consortium, physiological injuries, etc.) Most of the time, calculating the Special Damages is not very difficult and there is not much debate over the value of the medical bills, wage loss, and other medical expenses. You can add them all up and submit your receipts. However, calculating general damages, which includes pain and suffering, can be very difficult.

How much is your headache worth? Depends who you ask. If you ask the insurance adjuster, she will tell you about $5. If I ask you, then it is probably worth much more than that.

Personal injury attorneys use the medical bills or all “special damages” as a way to calculate general damages. Some multiply the medical bills by two, other by three or even four times (depends in your

jurisdiction). This is only a rule of thumb. The insurance adjuster will fight you and will tell you that that is not an accurate way to calculate pain and suffering. There are no laws that will give you a formula to calculate the value of the injury.

Simply multiplying your medical bills will not yield an accurate number. You could have an injury with medical bills of $2,000 but the pain and suffering be worth much more than three or even four times that value. For example, a fifteen year old girl that suffers a cut in her face, leaving a scar from her eye to her chin. Medical bills for stitches and cleaning the wound might not be very much, but the psychological injury of growing up with such injury could be worth much more.

Multiplying the medical bills is not very accurate when assessing the value of pain and suffering, however it can guide you. Remember that there are many more claim than just “pain and suffering” in a car accident. You can ask for loss of consortium, loss of earning capacity, loss of quality of life, etc. For a detailed list and explanation of each type of claim, visit http://www.auto-insurance-claim-advice.com/bodily-injury-claim.html. All of these claims can add to a lot of money. Most people forget to ask for any of those types of damages. Insurance companies do not explain the process and they just want a release for any and all claims, including all those damages you forgot or did know to ask for. Insurance companies do this on purpose. Be aware.

Insurance adjusters are ready to tell you that the value of the injury is separated from the accident itself. They are trained to argue that they are settling for the neck pain, not …