Which of the following is one of the four principal departments or functions of an insurance company?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The four principal departments of an insurance company are marketing, underwriting, claims, and actuarial. Underwriting selects and classifies risks, the claims department handles loss adjustments and payments, the actuarial department calculates rates and reserves, and marketing distributes the product through producers. Advertising, human resources, and customer billing are support functions that exist in many companies, but they are not counted among the four core insurance operations that define how an insurer conducts its business. Understanding these functions helps explain how an insurance company operates end to end.
Why the other options are wrong
- B) Advertising supports the marketing function, but it is not one of the four principal departments of an insurer.
- C) Human resources is an administrative support function present in most companies, but it is not a core insurance operation.
- D) Billing is part of premium collection and administration, not one of the four defining departments.
Memory hook
Four engines of an insurer: marketing, underwriting, claims, and actuarial.