Insurance

insurancebible-InsuranceInsurance is a service that provides a benefit upon the occurrence of a risk. The benefit, usually financial, may be intended for an individual, association or corporation, in exchange for the collection of a contribution or premium.
By extension, the insurance is the economic sector which includes the design, production and marketing of this type of service.

Risks covered
The conditions for insurability of a thing are the hazard, that is to say the unpredictability of an event in itself harmful or one of its characteristics (eg date of death), the independence of the will of the insured (eg divorce), the legality of the event (eg failure to ensure the consequences of a criminal conviction or fines). This implies among others that the known past events are uninsurable (already made disaster). Therefore, in principle, it is possible to obtain insurance for any event relating to the ownership of personal property, to that of real property, life, health, etc..
The types of insurance contracts are the most common life insurance policies and insurance damage or casualty (fire and casualty). We distinguish between contracts and health insurance (AP) and those of property insurance and responsibility .Personal insurance for life insurance are supplemented with personal injury insurance (health, disability and death from all causes). The property insurance responsibilities correspond to the property and casualty insurance out of personal injury. Sometimes, insurance companies provide lotteries and games, as improbable and important gains are possible.

How do the insurance companies?
To live, an insurance company must pay all claims that its insured will suffer, as well as its own operating costs. It is this balance "earnings / losses" is vital. Mutual insurance companies, limiting their "profits" to their own operating costs, and vary their rates are for the benefit of their contributors.
The total loss is by definition unknown, insurance companies start with "pool" the risks. Imagine 100 people uninsured, with a statistically in 100 chance of being injured: one of them likely will experience financial distress difficult to bear. As against 100 people if they bring mutualize and a small fee each constituting a common fund, they will be much better protected in case of disaster ... This mechanism aims to reduce the variability of losses. The amount of probable losses (plus a safety margin and operating expenses of the company) is paid by the insured (premium).
The money raised was not immediately returned to the insured, it can be placed, which provides an additional source of income in proportion to the profitability of these investments. This amount is particularly important in the long-tail (eg liability), where the loss, when it occurs, is compensated as many years after the perception of the premium. In the short-tail lines, this source of income is less important.
The insurer is then able to face a situation of normal claims experience. However, it is understandable that if a risk occurs simultaneously for a large number of insured (weather, natural disaster, etc..) Money payable by the insurer can greatly reduce its future earnings prospects, or even exceed its financial capabilities. The general technique of insurance is precisely to prevent the insurer is in this case. The insurer may increase the amount of future premiums to replenish the capital devoted to compensation.

In order to cope with exceptional claims, insurers can reinsure (frankly from them) their own risk with specialized companies and is the reinsurance. The use of reinsurance is systematic in the industrial risks, which are beyond the capabilities of most insurers. In the mid 1970s, an insured motorist inadvertently caused the MAIF the telescoping of two trains, blocking traffic for several weeks between Nancy and Paris (which had to be turned away at great expense by Troyes and Sedan).

The maximum reinsurance MAIF was reached, and the increase in annual dues (referred to in mutual contributions, premiums and insurance companies) was hardly noticeable by the insured because of that reinsurance.

It is significant to note that Lloyd's, insurer of the Titanic, honored its commitments and that no major setbacks threatened its existence. More recently, all compensation costs following the destruction of the WTC towers in September 2001 were about $ 100 billion, much from life insurance costs of the victims.