How is underwriting done?

Property/asset/personal insurance

In «insurance-speak» a distinction is made with regard to the type of insurance risk.

• Property insurance covers loss resulting from damage, destruction or theft of property such as movable property or real property including buildings.
• Asset insurance provides coverage for pecuniary or financial loss as the result of the occurrence of the insured event. Examples: liability, legal protection and business interruption insurance, in addition to hail insurance covering crops and other cultivated plants.
• Personal insurance extends to all insurance varieties in which a person is insured for medical expenses, temporary or permanent loss of income as the result of disability, death or old age.

Indemnity agreement/fixed-sum policy

• Upon the occurrence of the insured event, the benefits paid out under an indemnity agreement cover the actual loss or damage, with overall benefits being limited to the insured amount stated in the policy, meaning that an insured is restored to his or her original financial position after a loss and should not profit or be put at a monetary disadvantage by incurring the loss («enrichment ban»). An indemnity agreement is common in liability insurance, property insurance and fully comprehensive motor insurance.
• As its name implies, a fixed-sum policy provides for the payout of the amount indicated in the policy in the event of the insured event, irrespective of the actual loss incurred. In other words, a fixed-sum policy is not subject to an enrichment ban. Fixed-sum policies are common in life insurance, accident insurance and medical insurance.

Private/public insurance carriers

Insurance companies are distinguished according to the legal status of the underwriter. In contrast to public-law insurance carriers such as the Old-age and Surviving Dependants’ Pension Scheme (AHV), the Swiss National Accident Fund (Suva) or the cantonal fire insurance agencies, private insurance companies are incorporated under private law as joint stock companies or cooperatives.

Individual/blanket/group insurance

• Individual insurance provides coverage either for an individual person (in contrast to group insurance) or an individual item (in contrast to blanket insurance).
• In blanket insurance the insured property is not itemized. For example, contents insurance provides coverage in a single policy for the entire contents of a household in the same location.
• Group insurance is a single policy under which individuals in a natural group or at the same location are covered (e.g. employees of a company). The main feature of group insurance is that the taking out of the insurance policy, collection of premiums and policy administration are not done directly with the insured but rather via a group representative. The most frequent types of group policies are business accident and medical insurance in addition to group life insurance/pension funds.

 Voluntary/compulsory insurance

• In voluntary insurance it is up to the individual whether insurance is purchased to cover a particular risk. Examples: personal liability insurance, legal protection insurance or life insurance.
• In compulsory insurance cover is prescribed by law. Compulsory insurance fulfils a number of sociopolitical objectives (medical insurance, Old-age and Surviving Dependants’ Pension Scheme (AHV), etc.) or provides protection for injured parties (e.g. motor liability insurance). Compulsory insurance is also prescribed by law in connection with comparatively high risk (building fire insurance, nuclear energy liability, etc.).