insurance company and its functions

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Insurance companyandits functions
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Insurance means?

• Insurance is a means of protection from financial
  loss. It is a form of risk management primarily
  used to hedge against the risk of a contingent,
  uncertain loss.
• An entity which provides insurance is known as an
  insurer, insurance company, or insurance carrier.
  A person or entity who buys insurance is known as
  an insured or policyholder. The insurance
  transaction involves the insured assuming a
  guaranteed and known relatively small loss in the
  form of payment to the insurer in exchange for
  the insurer's promise to compensate the insured
  in the event of a covered loss. The loss may or
  may not be financial, but it must be reducible to
  financial terms, and must involve something in
  which the insured has an insurable
  interest established by ownership, possession, or
  preexisting relationship.

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Characteristics of insurable risks

1. Large number of similar exposure units
2. Definite Loss
3. Accidental Loss
4. Large Loss
5. Affordable Premium
6. Calculable Loss
7. Limited risk of catastrophically large losses

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• When a company insures an individual entity,
  there are basic legal requirements and
  regulations. Several commonly cited legal
  principles of insurance include
• Indemnity
• Benefit insurance
• Insurable interest
• Utmost good faith
• Contribution
• Subrogation
• Causa proxima
• Mitigation

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Types of functions by insurance company

• Auto insurance
• Gap insurance
• Health insurance
• Income protection insurance
• Casualty insurance
• Life insurance
• Burial insurance

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Types of functions by insurance company

• Property
• Liability
• Credit
• Other types
• Insurance financing vehicles
• Closed community and governmental self-insurance

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Insurance company

• Insurance companies may be classified into two
  groups
• Life insurance companies, which sell life
  insurance, annuities and pensions products.
• Non-life or property/casualty insurance companies,
  which sell other types of insurance.
• General insurance companies can be further
  divided into these sub categories.
• Standard lines
• Excess lines
• In most countries, life and non-life insurers are
  subject to different regulatory regimes and
  different tax and accounting rules. The main
  reason for the distinction between the two types
  of company is that life, annuity, and pension
  business is very long-term in nature coverage
  for life assurance or a pension can cover risks
  over many decades. By contrast, non-life
  insurance cover usually covers a shorter period,
  such as one year.
• Insurance companies are generally classified as
  either mutual or proprietary companies.36 Mutual
  companies are owned by the policyholders, while
  shareholders (who may or may not own policies)
  own proprietary insurance companies.