Insurance

Question 1

Which global reinsurer suffered losses due to the cancellation of the 2020 Tokyo Olympics?

Accepted Answer

Swiss Re

Question 2

Which of the following is a key financial metric used to assess the profitability of an insurance company?

Accepted Answer

Combined Ratio

Question 3

What is the key benefit of a diversified insurance portfolio?

Accepted Answer

Reduced concentration risk

Question 4

Which of the following best describes a 'run on an insurer'?

Accepted Answer

Policyholders simultaneously withdrawing or surrendering their policies

Question 5

What is the role of an actuary in an insurance company?

Accepted Answer

To design insurance products and calculate premiums

Question 6

Why is reinsurance important for credit risk management?

Accepted Answer

It helps manage large claim payouts

Question 7

What was one of the biggest financial mistakes AIG made before the 2008 crisis?

Accepted Answer

Overexposure to risky financial products like Credit Default Swaps (CDS)

Question 8

If an insurer has a claims ratio of 80% and an expense ratio of 25%, is it profitable from underwriting?

Accepted Answer

False

Question 9

What is the primary function of an insurance company?

Accepted Answer

To underwrite risks and provide protection against financial loss

Question 10

What strategy can an insurance company use to reduce its claims ratio?

Accepted Answer

Improve risk selection and pricing

Question 11

What caused the collapse of Indonesia’s Asuransi Jiwasraya?

Accepted Answer

Mismanagement and investment in high-risk, illiquid stocks

Question 12

What is the impact of low interest rates on life insurers?

Accepted Answer

Pressure on investment returns and reserve adequacy

Question 13

What does a Solvency II ratio above 100% indicate?

Accepted Answer

The insurer has more eligible capital than required

Question 14

What is reinsurance primarily used for?

Accepted Answer

Transferring portions of risk to another insurer

Question 15

Which asset class typically provides the most liquidity for insurers during times of financial stress?

Accepted Answer

Government securities

Questions 15