Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals
Characteristics Types and
Principles Study Guide
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
, Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf
Basic characteristics of insurance 1. pooling of losses
2. payment of fortuitous losses
3. risk transfer
4. indemnification
What is insurance? - A bunch of people that pay into a pool, only a few people actually have
losses. The company uses the pool to pay those people who were unlucky
pooling Everyone shares risk instead of one person paying 50k everyone pays a little
fortuitous losses loss must be random and or accidental, not planned
risk transfer You give your risk to the insurance company they take the financial hit
instead of you.
indemnification You get put back to where you were before the loss, not richer, just back to
normal
Law of large numbers More people in the pool = more accurate predictions, risk becomes more
stable
Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals
Characteristics Types and
Principles Study Guide
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
Insurance Fundamentals Characteristics Types and Principles Study Guide.pdf
, Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf
Basic characteristics of insurance 1. pooling of losses
2. payment of fortuitous losses
3. risk transfer
4. indemnification
What is insurance? - A bunch of people that pay into a pool, only a few people actually have
losses. The company uses the pool to pay those people who were unlucky
pooling Everyone shares risk instead of one person paying 50k everyone pays a little
fortuitous losses loss must be random and or accidental, not planned
risk transfer You give your risk to the insurance company they take the financial hit
instead of you.
indemnification You get put back to where you were before the loss, not richer, just back to
normal
Law of large numbers More people in the pool = more accurate predictions, risk becomes more
stable
Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf Insurance Fundamentals_ Characteristics, Types, and Principles.pdf
