Insurance definition
The definition of insurance varies according to perspective. Understand Insurance covers:
- From an economic point of view insurance reduces uncertaintythrough transfers and mergers (raising funds from third parties). share the same interests).
- From a legal point of view, insurance is an attempt to transfer risk Insurance premium paid by the insured to the insurance company based on the contract Damage payment. Individuals or companies in financial services institutions specializes in risk management.
- From a social point of view, insurance is an attempt to share risk to members of community membership groups through member dues
Losses suffered by one of its members as a result of the disaster. Based on the above understanding, it can be concluded that there are 4 parties involved
insurance namely:
- Insured
- Insurer
- Events
- Views
- Possible loss, e.g. possible losses are interpreted as opportunities for bad things to happen. Hazards are events that cause damage and loss natural (hurricanes, landslides, etc.), human actions (theft, sabotage etc.), finance (deregulation etc.) A hazard is a condition that increases the likelihood that a hazard will occur. These hazards are divided into four, among others; physical hazard, moral hazard, moral hazard, and legal dangers. Exposure is an action that ignores rules or actions violate the law, increasing the possibility of loss.
- Probability, so a condition related to time probability of occurrence. There are 2 types Probability, namely a priori probability (a priori probability) and Empirical probability (empirical probability).
- Law of large numbers (law of large numbers), namely the law that refers to predicting the size of the opportunity risk.
- insurance benefits.
- Provides a sense of security and protection Fairer distribution of costs and benefits (fair property price 0
- Gives a sense of security
- Opportunity to save
- Instruments for risk transfer and diversification
- Help improve the business of insurance companies
- Make life more calm and avoid stress
- Credit guarantees
- As a financial planning tool for personal finance and company finance. Parties involved in the insurance business
- Insurer (guarantor), namely the party who insures The risks associated with insurance contracts and payment contracts Claims for damages and other important issues related to the contents of the insurance contract.
- Insurer, i. H. the party representing the insured in its implementation Transactions on behalf of the Guarantor but not responsible for it promised and related to the terms of the contract.
- Insurance brokers, e.g. third parties who are not the guarantor and the insured move independently, insurance combined insured.