Podcast
Questions and Answers
What is the main objective of ensuring equity between Members in a modern P&I Club?
What is the main objective of ensuring equity between Members in a modern P&I Club?
Why do most P&I Clubs aim for a breakeven position on their underwriting account?
Why do most P&I Clubs aim for a breakeven position on their underwriting account?
What is the 'surplus' in a P&I Club often referred to as?
What is the 'surplus' in a P&I Club often referred to as?
Why has the tradition of calling in funds only as and when a claim needed to be paid been abandoned by P&I Clubs?
Why has the tradition of calling in funds only as and when a claim needed to be paid been abandoned by P&I Clubs?
Signup and view all the answers
What does the level of surplus represent for rating agencies in assessing the relative financial strength of the Clubs?
What does the level of surplus represent for rating agencies in assessing the relative financial strength of the Clubs?
Signup and view all the answers
What is the objective of mutual insurance?
What is the objective of mutual insurance?
Signup and view all the answers
How does self-insurance differ from commercial insurance?
How does self-insurance differ from commercial insurance?
Signup and view all the answers
How are claims handled in mutual insurance?
How are claims handled in mutual insurance?
Signup and view all the answers
Why does a commercial insurer charge an annual fixed amount of premium?
Why does a commercial insurer charge an annual fixed amount of premium?
Signup and view all the answers
What is the impact of not having capital providers on mutual insurers?
What is the impact of not having capital providers on mutual insurers?
Signup and view all the answers
Study Notes
P&I Club Objectives
- Ensuring equity between members in a modern P&I Club is crucial to maintain a fair and stable system.
Underwriting Account
- Most P&I Clubs aim for a breakeven position on their underwriting account to avoid financial instability.
Surplus
- The surplus in a P&I Club is often referred to as the free reserve or capital.
- It represents the excess of assets over liabilities.
Claim Payment
- The tradition of calling in funds only as and when a claim needed to be paid has been abandoned by P&I Clubs to ensure timely and sufficient payment of claims.
Financial Strength
- The level of surplus represents the relative financial strength of a P&I Club for rating agencies.
- A higher surplus indicates a stronger financial position.
Mutual Insurance
- The objective of mutual insurance is to provide insurance coverage to members at a lower cost by sharing risks.
Self-Insurance vs Commercial Insurance
- Mutual insurance is a form of self-insurance, where members pool their resources to cover each other's risks.
- Self-insurance differs from commercial insurance, where a third-party insurer provides coverage in exchange for premiums.
Claims Handling
- Claims in mutual insurance are handled by the members themselves, who share the costs and risks.
Premium Calculation
- A commercial insurer charges an annual fixed amount of premium to cover the expected losses and expenses.
- The premium is calculated based on the probability of risks and the expected losses.
Mutual Insurers
- Mutual insurers do not have capital providers, which means they rely on member contributions to operate.
- The lack of capital providers affects the financial stability and growth of mutual insurers.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Explore the concept of mutuality and the different ways of dealing with risk, including self-insurance and commercial insurance. Learn about the benefits and drawbacks of each approach, as well as the impact of today's litigious climate on organizations.
