General information about insurance and insurance company

Insurance is the economic relations are associated with the formation, distribution and the use of insurance funds in order to handle the risks and accidents. Insurance guarantees the reproduction and the social life occur naturally. This is the reason why the insurance company exists.

General information about insurance and insurance company

General definitions

Reinsurance Business

Reinsurance Businesses is the activities of insurers lucrative purposes, which insurers receive premiums the other insurer's commitments to compensate for the liability of the insured.

Insurers

Insurers are now established, organized and operated under the provisions of Insurance Law and other provisions of law relating to the business of insurance and re-insurance.

Insurance buyers

Insurance buyers are the organizations or individuals that have insurance contracts with an insurer and have to pay the premiums. Insurance buyers may also be insured or beneficiary.

Characteristic of the insurance company

Insurance is the risk transferring

- The risk is considered to be the premise of insurance, no risk and no insurance. Risk is a danger that losses occur unpredictably beyond the control of the one who joins insurance or the insured person. The purpose of the insured person is aiming to be protected and supported for them if there are any financial losses when risks happen. If the risks make any losses for the insured person, the insurer has to pay for the offset financial losses to the extent that the insured amount determined under the contract or the provisions of law.

Insurance is the splitting losses

The action of paying insurance fees to the insurance company is that the insured person suffered a minor loss of finance in exchange for peace of mind and if a risk occurs resulting in a huge financial loss, they will be supported by the insurers. Thus, financial losses of risks will be broken down into premiums.

Sharing losses

- Insurance company is operating under the principle of majority compensation. As a result of risks that occur with one or a few people, they will be offset by the money raised from those people who have the ability of such risks.

- Through the mobilization of necessary funds sufficient to settle compensation for losses that may occur in the community of the insured, the insurance company has offset the risk in accordance with the law of large numbers.

Insurance reimbursement is both anonymous medium without compensation

While the insured is in the time of insurance contract, if there are no risks affecting the object, the insurer does not pay compensation or pay for insurance, whereas if the incident insured, the insured person is indemnify.