Loss is not a disaster for insurers

GREETING INSURANCE ,Welcome to the bloggers on this blog . The discussion this time is the last discussion of the properties that a potential loss ( loss that may occur ) can be insured in accordance with the basic principles of insurance . This is the fifth trait of the basic principles that disadvantage is not a disaster for insurers or loss is not to say catastrophic.

    A single incident can lead to financial disaster for the party , both from the insured object or sourced from outside , seen as a potential loss that can not be insured . Such losses are not feasible insured because insurance companies can not promising the payment of compensation in a responsible manner .
To avoid losses catastrophic and to ensure that losses occur , individually , insurance companies can spread the risk to be guaranteed , ie , by issuing a policy covering a wide area . For example , if property insurance companies issuing policies that protect all houses within a 50 mile radius of an active volcano is not wise , because the volcanic eruption may lead to more claims of the insurer 's ability .In contrast , property insurance company will also issue policies that protect homes located in areas free of threats volcano . In order to avoid the death of one person causing a fatal loss for the insurer , allowed life insurance companies refuse insurance to the amount of insurance money that is not fair .Alternatively , the insurance company can hit the fatal probably losses by transferring the risk to another insurance company that in a sense , the other insurance company accepts responsibility to pay for all or part of the claim , in accordance with the portion of premium received .Shifting the potential loss , in this case , the insurance company ( insurer both ) and it is called reinsurance company receives named reinsurers . Through reinsurance , any opportunities that may result in catastrophic losses by insurance companies can be reduced and even eliminated .See you again in another discussion that would still be dealing with insurance in the websites of our beloved " CLOSER TO INSURANCE "GREETING INSURANCENATURE OF INSURANCE

    1. Losses must contain uncertainty .
    2. Losses should be limited .
    3. Loss must be significant ( mean ) .
    4. The ratio of the loss must be predictable .
    5. Loss is not a disaster for the party .