Uppsala universitet

4.2.1 Property/Casualty Insurance
The insurance product, albeit a service, has many different forms. Following the classification
above, we start with property insurance. The main types of contracts within this field are
homeowner’s and commercial, often subdivided into insuring agreements, identification of
covered property, conditions, stipulations, and exclusions. Homeowner’s insurance covers, as
the name indicates, individual and non-business property. Commercial, or business property
insurance, follows a similar pattern to that of individual property, although in some policies it is
more common to cover many kinds of property. In English this is often referred to as “building
and personal property coverage” (BPP). In such a policy, the business owner may cover the
buildings, fixtures, machinery, equipment, and the personal property of those for whom the
owner is responsible. The policy may also have extensions covering, for example, valuable
records. Casualty insurance provides the policyholder with cover against loss to persons and
property, including classes such as liability, theft, aviation, and worker’s compensation
(Encyclopaedia Britannica, Macropaedia, 1987). Casualty insurance is often put into the same
insurance category as property insurance, and in insurance jargon they are referred to as PC,
short for property/casualty. Related to casualty insurance for companies, there is often a clause
in liability insurance that covers the insured person’s possible liability for indemnification of
losses like personal injuries, property damages, or managerial misconduct. (Hörngren & Viotti,
1994)
4.2.2 Life/Health Insurance

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Life insurance includes all insurance that relates to an inevitable event, in the sense that the
event must occur at some time. Life insurance is mainly related to a person’s death or in the
case of a pension plan, the date on which he or she reaches a certain age and retires (Longman
Dictionary of Business English, 1989). Life insurance consists of a plan for distribution of
funds under which the larger group of individuals can balance the burden of loss from death for
the insurance beneficiaries. There are a number of different types of life insurance contracts,
such as term life for a specific period and whole life contracts that run throughout the whole of
the insured person’s life. Life insurance may also be classified according to type of customer,
where the major types are ordinary, group, and credit. Ordinary insurance concerns individuals
paying an annual premium. The group insurance market consists mainly of employers covering
their employees by group contracts. Credit life insurance is sold to individuals as part of a
purchase contract where the seller is protected for the balance of the unpaid debt should the
insured die before completion of the contract. Health insurance, within the private sector, is
usually financed on a group basis, with the money going into a special fund in order to cover
hospital costs, disability, and other major medical expenses, often subsidised by the
government and sponsored by the employer. In insurance policies, life and health insurance are
often treated together. (Encyclopaedia Britannica, Macropaedia, 1987)
Another type of insurance, representing a growing business as a result of deregulation,
is the unit link. Unit link insurance is life insurance where the policyholder has the possibility of
influencing the savings part. The customer pays premiums that accumulate in the form of
shares in a mutual fund, which he or she may alter if the revenue is not at a satisfactory level.
(Bergendahl, Hartman & Lindblom, 1990) This form of saving that includes insurance services
(or the other way around), is increasingly prevalent and is a trend related to the presently
decreasing rates of interest of ordinary bank accounts.