What is insurance – really?

Let’s see how many definitions or descriptions of insurance we can develop.  For starters:

  • Insurance is a risk-transfer mechanism that enables a person or company experiencing a loss to recoup all or some of the financial burden
  • Insurance is a legal contract – it is a compilation of terms, conditions and restrictions
  • Insurance is an information-based legal contract with a financial wrap (i.e. the payment of a claim as long as the loss adheres to the terms, conditions, restrictions and retention levels of the contract)
  • Insurance is the fuel of the capitalistic engine – without insurance,  nothing is built, nothing moves (thank you, Joe Plumeri for that one)
  • Insurance enables trade to happen – it is the glue or trust of the trade relationships

What would you add?

Published in: on July 21, 2009 at 7:19 pm  Comments (1)  

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  1. Well, insurance is probably all of that but in addition it seems that we spend much more time on getting things implemented, done, issued, printed, . And this increasingly on a global scale. Cross border, or multinational business is the new standard. Insurance companies have to get better and implementing and managing the insurance they sold before the act on the administrative side of things. interesting, from my point of view, is that primary insurer are clearly better positioned to differentiate themselves through services… but that is not really happening….

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