Actuarial science is the discipline that applies mathematical and statistical metho ds to assess risk in insurance, finance and

other industries and professions.

Actuaries and

are

professionals In many a

who

are

qualified in this field through education experience. must by countries, their of series actuaries competence demonstrate passing

rigorous professional examinations.

In life insurance, actuaries focuses on the analysis of mortality, the production of life tables, and the

application of compound interest to produce life

insurance, annuities and endowment policies.

In health insurance, including insurance provided directly by employers, and social insurance, actuarial science focuses on the analysis of rates of disability, morbidity, mortality, fertility and other contingencies.

In the pension industry, actuarial methods are used to measure the costs of alternative strategies with regard to the design, funding, accounting, administration, and

maintenance or redesign of pension plans.

The Institute of Actuaries of India, is the sole professional body of actuaries in India, and was formed in September 1944. It was formed by the conversion of the Actuarial Society of

India into a body corporate by virtue of the Actuaries Act, 2006.

The ASI was initially started as a non-examining body when Actuaries used to get qualified from Institute of Actuaries or Faculty of Actuaries of the United Kingdom.

Before 2006 actuarial society of india ASI is founding member of international

actuarial association the umbrella organization for all the actuarial body across
the world.

The whole actuaries comes under actuaries act 2006 passed by the parliament.

Advancement of the Actuarial profession in India. Providing opportunities for interaction among members of the profession. Facilitating research, arranging lectures on relevant subjects. Providing facilities and guidance to those studying for the Actuarial exams. To prepare "actuaries of tomorrow" who are adequately qualified and competent in the global context. To keep the level of competence on a continuing basis for fully qualified Actuaries at a high in the global context through CPD (Continuing Professional Development) and other programs.

To serve the cause of public interest through Professional Code of Conduct and Disciplinary Procedures.

COMPUTATION OF AUTO INSURANCE

McGraw-Hill/Irwin

Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

AUTO INSURANCE
Liability Insurance (compulsory insurance) - Covers any physical damages that you inflict on others or their property. (Mandatory) Bodily Injury Covers injury or death to people in passenger car or other cars, etc.

Property Damage Covers injury to someone elses property, i.e., autos, trees, buildings, hydrants, etc.
Comprehensive - Covers damages resulting from theft, fire, falling objects, etc. Collision - Provides protection against damages to your car caused by a moving vehicle. Covers the cost of repairs less the deductible.

20-8

COMPULSORY INSURANCE (TABLE 20.5)

20-9

CALCULATING PREMIUM: COLLISION (TABLE 20.8)

20-10

CALCULATING AUTO PREMIUM (TABLE 20.11)

Calculate the annual auto premium for Julie Fox who lives in Territory 5, is a driver classified 17, and has a car with age 3 and symbol 4. Her state has compulsory insurance, and Julie wants to add the following options: 1. Bodily injury, 250/500 2. Property damage 5M 3. Collision, $200 deductible Compulsory Bodily Property Options Bodily Property Collision

$ 98 $160

(Table 20.5) (Table 20.5)

(Table 20.6) (Table 20.7) (Table 20.8) (Table 20.9)

$228 $168 $191 ($148 + $43) Comprehensive $ 56

4. Comprehensive, $200 deductible

5. Substitute transportation 6. Towing & labor

($52 + 4)
Substitute trans. Towing & labor 16 4

Total annual premium $921

20-11

INTRODUCTION TO FIRE INSURANCE

20-12

THE LAW RELATING TO FIRE INSURANCE IS FOUND IN THE INSURANCE ACT 1983.
SEC 2(6A) OF THE ACT DEFINES A FIRE INSURANCE BUSINESS AS THE BUSINESS OF EFFECTING, OTHERWISE THAN INCIDENTALLY TO SOME OTHER CLASS OF BUSINESS,CONTRACTS OF INSURANCE AGAINST LOSS BY OR INCIDENTAL TO FIRE, OR OTHER OCCURRENCE CUSTOMARILY INCLUDED AMONG RISKS INSURED AGAINST THE FIRE INSURANCE POLICIES
20-13

MEANING OF FIRE INSURANCE CONTRACT

IS A CONTRACT WHERE ONE PERSON CALLED THE INSURED AGREES IN CONSIDERATION, OF A SUM OF MONEY CALLED PREMIUM , TO INDEMNIFY FOR ANY LOSS OR DAMAGE TO THE INSURED PROPERTY OR GOODS OF THE INSURED CAUSED BY THE FIRE.

20-14

THE CONTRACT SPECIFIES THE SUBJECT MATTER INSURED.

THE AMOUNT OF POLICY AND CIRCUMSTANCES OF UNDER WHICH INSURANCE IS NOT LIABLE. A FIRE INSURANCE CONTRACT IS FOR ONE YEAR BY LAW AND CAN BE EXTENDED BEFORE THE EXPIRY OF THE YEAR. THE PREMIUM CAN BE PAID AS LUMPSUM OR IN INSTALLMENTS.
20-15

CHARACTERISTICS OF FIRE INSURANCE CONTRACT

1. INDEMNITY CONTRACT : THE MAXIMUM AMOUNT OF LOSS TO BE COMPARED SHALL BE THE VALUE FOR WHICH THE POLICY HAS BEEN UNDERTAKEN.

2. UTMOST GOOD FAITH : BOTH THE INSURED AND INSURANCE COMPANY HAVE TO DISCLOSE EVERYTHING WHICH IS IN THEIR KNOWLEDGE AND MAY AFFECT THE CONTRACT.

3. PERIOD : A FIRE INSURANCE CONTRACT IS ONLY FOR ONE YEAR. IT CAN BE RENEWED AFTER MAKING PAYMENT OF THE PREMIUM WITHIN THE DAYS OF GRACE. 20-16

4.

INSURABLE INTEREST : THE INSURED HAS TO SHOW INSURABLE INTEREST, PEOPRIETARY OR PECUNIARY IN THE SUBJECT MATTER. IT SHOULD BE PRESENT BOTH AT THE TIME OF TAKING THE POLICY AS WELL AS AT THE TIME OF LOSS. 5. PROXIMATE CAUSE : THE RISK COVERED BY THE INSURANCE CONTRACT IS THE LOSS RESULTING FROM FIRE OR SOME OTHER CAUSE WHICH IS THE PROXIMATE CAUSE OF DAMAGE.

6. SUBROGATION AND CONTRIBUTION : THESE TWO PRINCIPLES APPLY TO FIRE INSURANCE.

20-17

MEANING OF FIRE
MEANING OF FIRE IN CASE OF FIRE INSURANCE THERE MUST BE ACTUAL FIRE OR IGNITION. IT MUST BE ACCIDENTAL IN ORIGIN SO FAR AS THE INSURED IS CONCERNED.
20-18

THANK YOU
20-19