The insurance risk transfer analysis is a process that is followed through for the purpose of insurance transaction. The purpose of this analysis is to examine a particular risk within the context of the relevant insurance contract. This is then transferred to another group of people who will not want such a risk and then to those who will want such a risk and even pay a fee for it. Hence, this shows transference of the policy from one insured group to another for the purpose of gaining premium.

This is especially seen in home insurance purchases where one is paying the company a certain premium so that it is able to take up the risk of mortgage payments etc. This also is relevant when there is any kind of property damage and the insurance company will take care of all the consequences and other details. This analysis is done frequently and is complex but it is necessary.

Sample Insurance Risk Transfer Analysis

Insurance Company: BB Q Insurance Pvt. Ltd.

Insurance Analyzed: Home Insurance

Insurance Policy Name: Smart Home Insurance


Analysis by: Steven Fox, ITB Analyzers

Purpose: To assess the risks associated with Smart Home Insurance with respect to the benefits offered and the risks that may be associated. This will allow a transfer of the insurance policy to the current target insured to another.

Benefits:

  • Covers all repairs and maintenance costs
  • Covers mortgage payments
  • Covers up to $3000 for every 6 months

Risks:

  • Too high a premium for the current middle class city market.
  • Too many complex enrollment processes
  • There are also certain coverage that will not be helpful to the target market

Transference to:

  • Suburban dwellers with a higher premium
  • Compatible with the different benefits covered
  • Enrollment process is easier handled.

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