PGI Commercial Lines Underwriting

Question 1

What factors does an underwriter consider when assessing a commercial property risk in Singapore?

Accepted Answer

Construction type, occupancy, fire protection, exposure to neighboring risks, management quality, and claims history

Answer

Commercial property underwriting considers COPE factors: Construction (materials, age), Occupancy (what the building is used for), Protection (fire suppression, sprinklers, alarms), and Exposure (proximity to neighboring hazards), plus management and claims history.

Question 2

What is 'highly protected risk' (HPR) designation in commercial property insurance?

Accepted Answer

Property with superior fire protection systems and management quality, qualifying for preferred underwriting terms

Answer

HPR designation applies to commercial properties with excellent fire protection systems (sprinklers, detection), strong risk management practices, and quality building construction — warranting preferential underwriting terms from specialist HPR insurers.

Question 3

In marine cargo underwriting, what does 'inherent vice' mean?

Accepted Answer

The natural tendency of certain goods to deteriorate or cause loss without external cause

Answer

Inherent vice is the natural tendency of certain goods to deteriorate, ferment, rust, or otherwise damage themselves due to their own properties — for example, fruit rotting, metal rusting, or chemicals reacting. This is typically excluded from marine cargo policies.

Question 4

What is 'accumulation risk' in underwriting and why is it a concern?

Accepted Answer

The concentration of insured risk in one location or from one peril, which could cause multiple policies to produce large simultaneous losses

Answer

Accumulation risk occurs when multiple insured risks share the same geographic area, industry, or peril. A single catastrophic event could trigger massive simultaneous claims across the accumulated portfolio, threatening the insurer's financial position.

Question 5

What is 'industrial all risks' (IAR) insurance and what does it typically cover?

Accepted Answer

Comprehensive property coverage for industrial plants, machinery, and equipment against accidental physical damage, with optional business interruption

Answer

Industrial All Risks (IAR) insurance provides comprehensive property coverage for industrial facilities, covering accidental physical damage to buildings, plant, and machinery from any cause except specifically excluded perils, typically with optional business interruption extension.

PGI Insurance Practice Test

PGI Insurance Practice Test

PGI Commercial Lines Underwriting