Insurance Industry Flashcards
1
Q
Define Insurance
A
Financial product to safeguard individuals, organisations and their property against risk of loss, damage or theft
2
Q
Over riding principles or basic characteristics of insurance?
A
-pooling of exposure to loss
-risk transfer
-payment of fortuitous losses
-indemnification
3
Q
What is pooling of exposure to loss?
A
Spreads exposure to risk across many participants
4
Q
What is risk transfer?
A
Transfers the risk of loss from the individual to the insurance company
5
Q
What is payment of fortuitous losses?
A
Losses must be unforeseen
6
Q
What is indemnification?
A
Cannot make a financial gain
7
Q
What is insurable interest?
A
The interest you have in something that can be insured
