Individual insurance

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Individual Insurance , Switzerland private insurance called, those are insurance in which the insurance contract due between the policyholder and the insurer concluded private law insurance contract is concluded.

Demarcation

Individual insurances differ from social insurances ( statutory pension insurance , health insurance , unemployment insurance , accident insurance and long-term care insurance ), which are compulsory for every employee within the framework of the mandatory insurance limits and exist due to the law through inclusion in a public organization.

Freedom of contract

The services and considerations ( contribution ) in individual insurance are freely negotiable between the contracting parties , except for minor restrictions imposed by statutory provisions for the protection of policyholders, in particular the Insurance Contract Act and the Insurance Supervision Act . However, since insurance means managing risk on the basis of risk compensation in the collective, insurers must always endeavor to conclude as large a number of contracts as possible that are as similar as possible. Therefore, and not least because of the rationalization effect, insurers usually conclude contracts according to a pre-designed model that they develop for themselves with a view to the greatest possible acceptance in the market. With these contract models you try to meet the insurance needs of as many potential policyholders as possible. The scope and content of social insurance, on the other hand, is determined solely by politically motivated requirements of the legislature.

Compulsory insurance

Individual insurance can also be compulsory (like social insurance for the legally designated persons) . In this case, the persons concerned are legally obliged to conclude an insurance contract that meets certain criteria. The insurer can largely be chosen freely (in contrast to the previous compulsory insurance, where the insurer was also required and the contract was often already concluded by law, e.g. when buying a house). This is e.g. This is the case, for example, in the case of health insurance, unless health insurance coverage already exists through social insurance. Operators of a motor vehicle are also obliged to take out insurance against possible liability arising from the operation of the vehicle. Otherwise there is only an obligation to take out insurance in special cases, in particular for members of certain professions, tradespeople and companies.

Types of individual insurance

Personal insurance

The term personal insurance summarizes all insurances that serve to cover / prevent the risks inherent in the person. The term usually does not include accident insurance, as this is included in composite insurance. Personal insurance are in particular:

Composite insurance (property insurance)

The term composite insurance covers all types of property and casualty insurance, with the exception of health insurance. Life insurance serve the insurance protection of property ( insurance ) as well as the security of liability risks . Private accident insurance - which is part of personal insurance and is a sum insurance, i.e. not a property insurance - is combined with property insurance to form composite insurance for regulatory reasons, as it may only be operated by insurers who otherwise operate property insurance, but not by life or health insurers . Classic sorting (insurance branches of the GDV ) for composite insurance is:

Industrial insurance / commercial insurance

Due to the special requirements and insurance products, insurance for companies is usually considered separately. Many insurers also separate between commercial and industrial insurance. In addition to property and liability insurance, which is also common in the private sector, the following products, for example, are typical for commercial / industrial insurance:

In the case of so-called serious risks, several insurance companies can form an insurance pool or consortium . Several insurers participate proportionally (defined as a percentage ) in a single insurance contract ( open co-insurance ). There is an entitlement to the insurance premium only according to the subscribed portion, at the same time the insurer only has to participate in claims payments with the previously determined percentage.

The insurer with the highest participation rate is the leading insurer or consortium called. This is the main point of contact for the policyholder and handles claims processing, for example. As a rule, the other insurers involved only need to be notified in the event of matters relevant to coverage (e.g. when the sum insured is increased ). In addition, the parties often agree that claims by the policyholder for insurance benefits can only be brought against the leading insurer. Judicial decisions are then also effective against the insurers involved.

Depending on the severity of the risk, the consortia can regularly consist of five or more insurers, each of which only participates in the contract with a small percentage. Some insurers have specialized exclusively in subordinate participation in insurance contracts, as they cannot manage insurance contracts due to limited financial resources or a lack of specialist capacities.

In addition to the joint (horizontal) percentage participation in the risk, so-called (vertical) layer covers are also usually used for the insurance of major risks ( excess insurance ). Each insurer assumes a total portion (layer) of the total sum insured, for example the portion touched in the event of a claim between € 50 and 100 million. Mixed forms of co-insurance and layer coverage, in which several insurers jointly cover one layer, are the rule for amounts insured over € 100 million.

The formation of consortia is regularly criticized by the cartel because several insurers agree on identical insurance premiums and coverage. In principle, these are price agreements. So far, however, there have been no restrictions on the part of the legislator, since on the one hand competition between insurers is still preserved and on the other hand many risks cannot be borne by one insurer alone.

International insurance programs

Another special case of industrial insurance are the so-called international insurance programs . These programs offer uniform insurance solutions for global companies . This essentially relates to property and liability insurance. When designing these programs, a large number of national insurance regulations and specifics must be taken into account. In various countries, for example, there are compulsory insurance regulations or state-set premium rates. Due to the complexity, only international insurance groups can offer such insurance programs. Customers often turn to insurance brokers with an international network for support .

The design of the international insurance programs results from the legal regulations in individual countries. In many countries, insurance cover may only be granted by locally approved insurance companies, and compulsory insurance (e.g. neighborhood liability in Italy) must be taken into account. An international program must therefore do justice to the local characteristics as well as offer uniform insurance cover worldwide.

This is ensured by the combination of local insurance policies and a master contract . The local insurance contracts are based on local insurance concepts and meet the legal requirements. The master contract offers insurance cover for claims that are not / not sufficiently covered by local insurance contracts. The master contract extends the scope of coverage of the local policies both with regard to insurance conditions (Difference in Conditions, DIC) and the sums insured (Difference in Limits, DIL). Since it does not make sense to take out insurance contracts with a different insurance company in every country, an insurance group (or consortium) signs both the master contract and the various local policies. The principle of fronting is used in order to achieve appropriate accounting delimitations and to enable a uniform view of premiums and claims . In each country, the local insurance company concludes a reinsurance contract with the insurer, who also signs the master contract (which is usually based in the country in which the head office of the insured group of companies is also located). Since the local contracts are usually 100% reinsured, there is in fact no risk and no insurance premium left with the individual local insurance companies. The local insurers only receive a business fee , the so-called fronting fee, for administrative activities .

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