WorksheetsIFE S5 Insurance, Pensions and Collective Investments
Total questions: 10
Worksheet time: 5mins
Which historic event had a major impact on the creation of property insurance in European countries?
Magna Carta (1215)
The Napoleonic Wars (1803-1815)
The Great Fire of London (1666)
The founding of the Dutch East India Company (1602)
The law of large number implies that...
when throwing a dice, large numbers become a more likely outcome as we continue throwing the dice.
when looking at a large population extreme events become more likely.
the law of large numbers refers to how insurance companies have to deal with large claims.
the statistical property that makes it easier to predict the average outcome of a large population as opposed to the average outcome of a small population.
Which is NOT a reason that in general motivates people to buy insurance?
People buy insurance for saving purposes.
People buy insurance to support the community.
People buy insurance because they are risk averse.
People buy insurance to gain planning security.
In the context of insurance markets, what does the term ‘underwriting’ imply?
Underwriting refers to accepting insurance claims without investigating whether they are justified.
Underwriting refers to accepting insurance claims after a thorough investigation.
Underwriting refers to extending the insurance contract to underage family members when health insurance cover is bought.
Underwriting refers to establishing the amount the insurer has to pay and the amount the insurance company has to pay in case of claims and writing the contract.
For which insurance type is an increasing life expectancy potentially problematic, if any?
Health insurances, given that an ageing population might increase future claims more than expected.
Fire insurances, given that an ageing population implies that also the building become older.
Life insurances, since an ageing population increases the likelihood of death.
None of the them.
The term 'asymmetric information' refers to...
the case where one party has more information than another party and could exploit the situation.
the case where a pool of individuals that are more likely to file for claims are insuring themselves over proportionally as compared to the lower risk type of individuals.
the case where the insurer changes her/his behaviour in an adverse way after she/he is covered by an insurance contract.
the case where the interests of the insurer and the insurance company are conflicting.
The term ‘adverse selection’ refers to…
the case where one party has more information than another party and could exploit the situation.
the case where a pool of individuals that are more likely to file for claims are insuring themselves over proportionally as compared to the lower risk type of individuals.
the case where the insurer changes her/his behaviour in an adverse way after she/he is covered by an insurance contract.
the case where the interests of the insurer and the insurance company are conflicting.
The term ‘moral hazard’ refers to…
the case where one party has more information than another party and could exploit the situation.
the case where a pool of individuals that are more likely to file for claims are insuring themselves over proportionally as compared to the lower risk type of individuals.
the case where the insured individuals change their behaviour in an adverse way after they are covered by an insurance contract.
the case where the interests of the insurer and the insurance company are conflicting.
Which of the following countries has the largest insurance market?
UK
Germany
France
Japan
The term ‘reinsurance’ refers to…
renewing an insurance policy.
insuring retrospectively, i.e. after a claim occurred.
the verification that a claim is due after an incident occurs.
insurances insure themselves against high claims.
