Welcome to the global business guide. In this context, i will be taking about the insurance industry, the definition of insurance, adequate and precise explanation of the definition, brief talk about bicycles, the insurance organisation, the insured, classes of insurance, the role of the insurance underwriter in the industry and how you as an individual may benefit maximally when you have yourself, your car, your house, even that your business insure. We do hope you will enjoy scanning this article and the substance of your search for the topic above will be met.
Insurance is a financial institution classified annuities as a not for bank financial institution. They are important financial inter-mi diaries. It is shown to have originated from the ancient practices of occupants of the valleys of waters Tigris and Euphrates in our day Iraqi in about 4. 000BC. History has it that in 1800BC, the Babylonians code of Hammurabi contained convention which had components of insurance in the laws that govern their commerce. But today what we have in the industry, both locally and internationally had moved from just an agreement between two persons into a very big industry across the globe.
Going by definition, we learn that insurance means an issue whereby someone protects his or herself against risk and reduce effects of questions as well as distribute loss. Other explanation to this owe it to the situation whereby a certain amount of money when collected from someone by an insurance company believes to pay a compensation or establish services fot it person if and whenever see your face suffers the kind of loss specified in the insurance agreement; and from the explanation, this is where an insurance company is needed since they are the people that will go into agreement with the person taking any insurance policy against any of his belongings. This industry has widely been believed as an approach whereby people reduce the risk of unanticipated circumstances. As financial intermediaries, they act as middlemen between the surplus units and deficit units of the economy thereby preserving the growth of the economy.
It’s possible to ask, how do insurance companies generate the money used in paying their policy holder when affected by any issue? The answer to this question, will lead us into talking about the various means via how the insurance companies make their money and how their policy cases are compensated.
The truth is that, the money they collect from their policy holder (i. e one that has an agreement with the insurance company) is invested in the form of premiums (an extra n amount of money paid in addition to the normal cost of something. by BBC. Eng. dict) and that money is committed to Bonds, in stocks, mortgages (i. e house) and government sec (in our subsequent article, we will explain more of this: Bonds, stocks, mortgages and federal government. securities).
They earn cash for themselves and those who are in their service. They invest their policy holder’s money in better business that has short term maximum returns on investment and from there meet their numerous needs when needed in claims and losses. These funds themselves are invested, that not only do they earn interest to be added to the funds, but they also benefit the costa rica government, public authorities, and industries whoever sec the investment are spread, because of the investment policy of the insurance organisation (we will explain later), their reserve funds are not left idle butt are used proficiently.