according to the financial indices can insurer generate profits from underwriting business after 10 years

Expert Solution

FIRST OF ALL WHAT IS A "FINANCIAL INDICES"

A financial indices or the" financial index" is the kind of indicator or the measure of something in finance , it basically refers to the statistical measure of change in the securities market . In the financial market INDICES consist of a hypothetical portfolio of securities which represents a particular market .

WHAT IS "'UNDERWRITING "

Underwriting is one of the important functions in the financial market .Where an individual or an institution undertakes the risks associated with a venture or an investment . it can be found in banking , insurance and stock market . In insurance market the insurance agency have to decide whether to take the risk of insuring the particular client or not .

" INSURER "

A insurer is a person or a company that underwrites an insurance risk , they insure the party to pay the compensation to there risk . They makes a contract or a deal between them to pay the compensation as per the terms and the conditions for long term or for short term depends as per the risk and its measures .

YES , as per the financial indices an insurer can generate profit from underwriting business after 10 years because it totally depends upon the nature of the business , capital , liabilities ,types of insurance they are willing to take and the period of time (i.e. long term insurance or the short term insurance) .

first the insurance company goes through a very detailed underwriting process to ensure that the the applicant is eligible for it . Rate charged will be more then the amount they have to pay to cover it . longer the years of risk higher will be the rate due to this they are able to earn more . They never insure the businesses those are in the stage of insolvency or bankruptcy . If the business tries to fool the insurer the contract will be failed and and the insurer can sue the business or can settle it by getting the lum sum amount form the business or getting the refund as per the contract formed before .

Rahul Sunny answered 1 year ago

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according to the financial indices can insurer generate profits from underwriting business after 10 years

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