Insurance Terminology

• Insured / Policyholders ~ The person (or corporation) purchasing insurance.
• Insurer ~ A body or person authorised to sell insurance.
• Peril ~ A contingency or fortuitous happening which could losses. Cause of loss.
• Claim ~ A demand presented to the insurer, by policyholder or beneficiary, for the payment of the proceeds stated in the insurance policy.
• Underwriting ~ The process of reviewing applications for coverage. Applications that are accepted are then classified by the underwriter according to the type and degree of risk.
• Premium ~ The consideration an insured pays to the insurer for an insurance coverage of a specified nature for a specified policy period.
• Loading ~ A process used to determine insurance premium by adjusting the expected value of claim payments to provide an allowance for the cost of insurance-related services, uncertainty and profit.
• Risk ~ (a) A situation which cannot be controlled or perfectly foreseen. (b) The subject matter of an insurance contract.
• Loss ~ A claim either paid or payable due to the insurer's policy obligations.
• Insurance ~ A system for transferring the responsibility for paying for losses from one party to another.
• Insurable Risk ~ A Standard risk which an insurer is willing to insure at the standard rates.

Source : Oswald Timothy Edward & Yon Bahiah Wan Aris, "Fundamental of Insurance", UiTM, 2002.