Reflection Paper
The concept of insurance may have started a long time ago through informal risk sharing practices. Modern insurance is a more recent development that began in the 16th Century. However, the impact and the essence of insurance only became of interest to the financial market over 100 years ago and it has grown to be an immense international business. The insurance theory is applied in a number of ways including the Affordable Health Care Act, compensation of workers, liability, and property. The insurance theory also has a wide array of functions in claims administration, underwriting, marketing and in companies where it used to address a wide range of policy issues (Venezian 91). Learning insurance theory and practices prepares individuals for careers as underwriters, risk managers, claims adjuster among others. This paper seeks to describe how my thinking has changed as a result of my work with concepts and practices in this course.
Application of Insurance Theory
Some of the important applications of the insurance theory is the Affordable Health Care Act which enables people to sign up for the most favorable health plan of their choice based on the Monthly Premiums ranges, deductible ranges and cost estimate ranges. The theory is also important in the formulation of strategies that a given company can employ in the compensation of workers so as to minimize the risk of injury. The workers can also benefit from a health insurance. The formulation of such policies fosters a good working environment and reduces the chances of employees suing their employer. People can also insure their property from the risk of fire and other natural disasters as well as vandalism (Thoyts 110).
Insurance is often used by companies and self-funded private and public corporations for a variety of functions. For instance, the insurance function of marketing focuses on ensuring that major companies increase their sales and maintain their market positions and provides a platform which can be used by small corporations to grow their business. On the other hand, insurance underwriting is based on the formulation of tactics and strategies that help companies to be ahead of their competitors. Basically, it is the role of the insurance underwriter to ensure that the marketing strategies are oriented towards the sale or the promotion of the insurance services to the insurer. Thus, they have to create the demand for the insurance service and to align the client’s interests with that of the company (Thoyts 112).
The insurance function for claims administration is essential in investigating, analysing, and determining the liability of an insurance company concerning property damage or loss, casualty and to effect the settlement of these claims. The liability of the insurer can be accessed effectively by compiling reports based on information from claimants, witnesses, agents and medical specialists. The benefit payments can then be calculated and payment of claims approved within a certain financial margin (Kaptan 79).
Public Policy Issues
A number of public policy issues can be addressed effectively through the theory and practice of insurance. One of the policy issues is regulation during financial crisis. The incorporation of insurance practices ensures that firms come up with new instruments based on the risk management practices so as to prevent market failures. On the other hand, the tort vs. the no-fault systems is a policy issue that determines the kind of insurance system that can be availed to a given state. Another policy issue is the implementation of the Affordable Health Care Act which ensures that people receive affordable and quality health insurance by expanding the insurance coverage in the private and public sector through lowered insurance rates. Other policy issues include self-funded programs and alternative risk financing methods (Nasreen 87).
How This Understanding of this Course Will Affect My Future Work
The concepts have also enlightened me on the concept of compensation of workers with regard to the administration of claims. I have always wanted to pursue a career that is in line with the rights of workers mainly with regard to issues of compensation. This course has actually helped me to narrow down my career prospects to two main fields. The first option would be to work as a claims adjuster. The work of a claims adjustor is challenging and equally rewarding since claims have to be settled effectively using a small fraction of the insurance company’s money. Thus, the claims adjustor has to represent the interests of the company and the client and ensure that both are satisfied at the end of the negotiation once settlement is done (Kaptan 81). The second career that I can opt to pursue is that of an underwriter. Underwriters have to come up with insurance services that are in line with the interests of the clients. The quality of the insurance service received influences the demand for that service and ensures that more people are covered by it. If the underwriter fails to convince clients that this is an actual need, then the service will be eliminated in the long run and clients will be exposed to high risks (Thoyts 114).
How I Used the Activities in the Course to Build a New Understanding
Most of the activities that i have undertaken during this course have helped to build a new understanding of this course. For instance, I have learnt the importance of the loss ratio review standards which enables people to ascertain whether the premium price is reasonable. I have also gained an understanding of the different insurance packages and how they can be applied based on the size of the corporation and the number of people. The SHOP health insurance service stood out as the best insurance policy for small businesses mainly because it is relatively cheap. I also gained insight on some of the available health plans. Based on the tasks carried out in class, I now have a reason as to why i would advise someone to go for the silver plans. The silver plans have more reasonable price and sufficient service. I also got a chance to look at data from Minnesota Workers’ Compensation Insurers Association, Inc. and this helped me to understand the concept of workers compensation and EM rate.
Generally, the concept of insurance has been in existence for a long time through informal settlement of claims and has since grown to be among the most lucrative of enterprises. People have since grown to appreciate the importance of insurance as a way of safeguarding them against risks. People who pursue a career in insurance can work in various capacities and represent the interests of the clients in several ways. Most of the ideas learnt in class coupled with the assignments have brought a new meaning to this course since they have enabled me to gain some practical insights on what I may pursue as a career. Actually, they have somewhat narrowed my career prospects by giving insights on the different responsibilities associated with different positions.
Work Cited
Kaptan, Cengizhan. "Credit Insurance, Risk Mitigation Techniques and Economic Contribution". SSRN Electronic Journal (2013): 77-93. Web.
Nasreen, Reshma. Insurance and Risk Management. Lucknow, India: Word-Press, 2009. Print.
Thoyts, Rob. Insurance Theory and Practice. Milton Park, Abingdon, Oxon: Routledge, 2010. Print.
Venezian, Emilio. "Some Comments on Catastrophe Risk Management and Insurance". Asia-Pacific Journal of Risk and Insurance 4.1 (2009): 88-117. Web.
