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Give an outline of the major points of the text.

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Section B

Language focus

1. a) Complete the texts using the words in the box in the correct form. Some words are redundant. After filling in the blanks continue the discussion of the major topic of this unit: “Insurance market”.

to consider, coverage, specified event, insurance policy, to indemnify, loss event, insured, material, to assume, out-of-pocket costs, sue, pay claims


To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a ___(1)___ or peril. Accordingly, life insurance is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally two types of insurance contracts that seek ___(2)___ an insured:

1. an "indemnity" policy, and

2. a "pay on behalf" or "on behalf of" policy.

The difference is significant on paper, but rarely ___(3)___ in practice.

An "indemnity" policy will never ___(4)___ until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and ___(5)___ you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the ___(6)___ (the $10,000).

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the ___(7)___ (the homeowner in the above example) would not be out-of-pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language.

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk ___(8)___ by an 'insurer', the insuring party, by means of a contract, called an insurance policy. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular ___(9)___ covered, the amount of ___(10)___ (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy.



margin, a contract, to entitle, a policy, the premium, a claim, anticipated losses, global insurance, to reserve, to specify, to absorb, to expose

When insured parties experience a loss for a specified peril, the coverage ___(1)___ the policyholder to make ___(2)___ against the insurer for the covered amount of loss as ___(3)___ by the policy. The fee paid by the insured to the insurer for assuming the risk is called ___(4)___. Insurance premiums from many insureds are used to fund accounts ___(5)___ for later payment of claims — in theory for a relatively few claimants — and for overhead costs. So long as an insurer maintains adequate funds set aside for ___(6)___ (called reserves), the remaining ___(7)___ is an insurer's profit.

Global insurance premiums grew by 3.4% in 2008 to reach $4.3 trillion. For the first time in the past three decades, premium income declined in inflation-adjusted terms, with non-life premiums falling by 0.8% and life premiums falling by 3.5%. The insurance industry ___(8)___ to the global economic downturn on the assets side by the decline in returns on investments and on the liabilities side by a rise in claims. So far the extent of losses on both sides has been limited although investment returns fell sharply following the bankruptcy of Lehman Brothers and bailout of AIG in September 2008. The financial crisis has shown that the insurance sector is sufficiently capitalized. The vast majority of insurance companies had enough capital ___(9)___ losses and only a small number turned to government for support.


Advanced economies account for the bulk of ___(10)___. With premium income of $1,753bn, Europe was the most important region in 2008, followed by North America $1,346bn and Asia $933bn. The top four countries generated more than a half of premiums. The US and Japan alone accounted for 40% of world insurance, much higher than their 7% share of the global population. Emerging markets accounted for over 85% of the world’s population but generated only around 10% of premiums. Their markets are however growing at a quicker pace.


a) Translate the following word-combinations into Russian paying special attention to the difference in the meaning of the words:

1. life insurance premium, share premium, to stand at a premium, to charge a premium, shift premium, single premium;

2. capital loss, pure losses, indemnified loss, loss of goodwill, loss and gain, to avert losses, to substantiate a loss, to yield losses, at a loss, markdown loss;

3. utmost good faith, to be faithful to smb., faithless, in good faith, to loose faith;

4. claim for compensation, first claim, priority claim, monetary claim, claim for losses, to acknowledge a claim, to file a claim, statutory claim.

b) Match the words with similar meanings:

1. contents 2. take steps 3. tailor made 4. taking into account 5. peace of mind 6. second to none 7. “new for old cover” 8. wear and tear 9. pick up the bill a. especially designed b. settle an account c. household possessions d. serenity e. receive full compensation f. bear in mind g. damage through use h. do what is required i. cannot be bettered




1. incurred 2. reinstatement 3. option 4. betterment 5. prior to 6. residual 7. settlement 8. liable 9. arising 10. solely 11. occupied 12. material property 13. custody 14. incident 15. consent a. remaining b. responsible c. only d. return to previous condition e. improvement f. choice g. event h. payment i. before j. legal control k. caused by l. agreement m. resulting from n. physical things o. lived in




С)Choose the correct alternative to complete each sentence. Afterwards continue the discussion of the major topic of this unit: “Insurance market”.

World Insurance Companies

The top insurance companies of the world ___(1)___ a major part of the financial services worldwide, and a huge part of insurance worldwide. ___(2)___ of financial market reforms by almost all the countries worldwide has given birth to a more competitive environment in this sector than in the past.

Despite the financial shakeout which began in September 2008, insurance companies are still ___(3)___. While many people have lost their homes and jobs, insurance is one product many people cannot ___(4)___. Whether by law or by necessity, people still have car, health, life and other types of insurance in effect. Most of the top insurance companies of the world remain financially ___(5)___, with some exceptions.


Furthermore, with more people owning vehicles, homes, and more people earning greater amounts worldwide, the need to have them insured has emerged, creating an entirely new segment for the insurance companies. This is particularly true in emerging markets such as India and China where this phenomenal growth ___(6)___.


Note that the housing slump and automotive meltdown in the US have put a considerable damper on adoption of new policies there, and in Europe, but again, India and China remain strong. The big insurers in this sector, including the top ___(7)___ companies, have stepped forward with their strategies to adapt to the changing global ___(8)___ and markets.


1. A. consist B. take up C. make up

2. A. adaptation B. adoption C. adopting

3. A. forging ahead B. going out C. moving in

4. A. do with B. live on C. do without

5. A. boosted B. robust C. bust

6. A. has occurred B. aroused C. has risen

7. A. damper B. danger C. damage

8. A. landing B. landslide C. landscape

d) Antonio Alessandro has sent a claim form to his insurer after a fire at his restaurant. He receives the reply below. Complete the text with appropriate words from the box.

claim cover legal costs policy compensation estimate loss adjuster premium comprehensive indemnity no claims bonus


Bridge Insurance Ltd

124 Kew Gardens Road, London SW2 5HB

Tel: 0171 433 8211-15 Fax: 0171 433 563318


Antonio Alessandro


120 Riverside Road

London EC23 5TR

2 March 19..


Dear Mr Alessandro


Rat Policy number DR 239981 R, Claim Ref. DR4381

Thank you for you (1) … relating to the fire at your restaurant. We confirm that your policy is (2) … and therefore covers fire.

Our (3)…, Peter Carrow, will visit you on 7 March to see the damage.

You will receive (4)… for all damage to the building and equipment. You should supply an (5)… from two firms for the repairs. You will also receive (6)… for loss of business, though you will have to make a separate claim. In addition, your (7)… policy also provides (8)… for any (9)… which may arise.

Finally, we would like to inform you that your (10)… will rise by 10% as your (11)… will be affected by this incident.


Yours sincerely


Claims Manager


e) Number the following words with their underlined equivalents in the text:

affluent catastrophes claims commission gilts huge indemnify insurance brokers policy retiressums underwritten


Insurance is designed to provide a sum of money to compensate for any damage suffered as the result of a risk that has been insured against in a specific insurance (1) contract, such as fire, accident, theft, loss, damage, injury or death. Thousands of people pay premiums to insurance companies, which use the money to (2) compensate people who suffer loss or damage, etc. Some people also use insurance policies as a way of saving. Life assurance policies, for example, usually pay a certain sum on a specific date – for example, when a person (3) stops working at the age of 60 or 65 or whenever, or earlier if the person dies.

Insurance companies, like pension funds, are large institutional investors that place great (4) amounts of money in various securities: shares, bonds, (5) British government bonds, etc.

Insurance companies generally employ their own agents who sell insurance to customers, but there are also insurance brokers who work with several companies, selling insurance in return for a (7) percentage of the premium.

If a particular insurance company considers that the risk it has (8) assumed responsibility for is too big, it might share the business with other companies, by way of reinsurance. Lloyds of London underwrites a great many risks which are spread among lots of syndicates, made up of groups of (9) wealthy people known as “names”. In return for earning a percentage of the insurance premiums, the names have unlimited liability for losses. After a series of (10) demands for payment following lots of (11) natural disasters (shipwrecks, earthquakes, hurricanes, and so on) in the late 1980s, many Lloyds syndicates had to make (12) enormous pay-outs, and many names were bankrupted.


a) Choose the noun that collocates with the following verbs. Translate the expressions into Russian.

a) damage(s) b) loss(es) c) insurance d) a policy

1. o pursue, to subscribe to, to take out, to implement, to cancel, to amend, to reinstate, to issue;

2. to adjust, to incur, to set off, to repair, to sell at, to mitigate, to entail, to cover;

3. to inflict, to estimate, to subject to, to patch, to pay, to claim, to experience;

4. to undertake, to provide, to arrange, to suspend, to effect, to carry, to furnish, to place.


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