Fundamentals interview questions for insurance roles
89 questions from core to advanced: concepts, calculations, whiteboard diagrams, SQL, scenarios and behavioural. Answer out loud first, then reveal the model answer and example. Mark each one practised when you can answer it without looking.
Practised 0 of 89
What is insurance, and how does an insurer make money?
- Risk transfer: many pay a small certain premium, the few with losses are paid.
- Underwriting profit when the combined ratio is under 100%.
- Investment income on the float (premium held before claims are paid).
Explain the principles of insurance with a system example for each.
- Utmost good faith → proposal declarations and moratorium rules.
- Insurable interest → RC owner must be the proposer for motor.
- Indemnity → IDV and depreciation cap the payout.
- Contribution → CPA waiver when another PA cover exists.
- Subrogation → insurer recovers from the at-fault party.
- Proximate cause → claim admissibility rules.
Difference between life, general and standalone health insurers?
- Life: long-term protection and savings, mortality-based.
- General: motor, property, liability, mostly annual.
- Standalone health: health only; general insurers also sell health.
- The composite licence idea was dropped from the 2025 amendment, so these stay separate.
What are loss ratio and combined ratio, and why do they matter to a BA?
- Loss ratio = claims incurred ÷ earned premium.
- Combined ratio = (claims + expenses) ÷ earned premium.
- Features that cut leakage (fraud rules, STP) or expenses (digital journeys) show up directly in these numbers, so they make strong success metrics.
Who are the intermediaries in Indian insurance?
- Individual agents and corporate agents (banks as bancassurance).
- Brokers (represent the customer), web aggregators, POSP, Insurance Marketing Firms.
- Motor dealers act as corporate agents or POSPs; IRDAI's 2026 proposal would let qualifying dealers register as distribution entities.
What is reinsurance and why would it affect a system you build?
- Insurance for insurers: treaty or facultative, proportional or excess of loss.
- Systems must capture cession, retention limits and recoveries per policy or claim.
- Obligatory cession to GIC Re applies.