Part.II
Applicability of probability in insurance:
Principles of Insurance:
The insurance is based upon (i) Principles of Co-operation and, (ii) Principles of Probability.
> Principles of Co-operation:
Insurance is a co-operation device. If one person is providing for his own losses, it cannot be strictly insurance because in insurance, the loss is shared by a group of persons who are willing to co-operate. In ancient period, the persons of a group were willingly sharing the loss to a member of the group. They used to share the loss to a member of the group.
They used to share the loss at the time of damage. They collected enough funds from the society and paid to the dependents of the deceased or the persons suffering property losses.
The mutual co-operation was prevailing from the very beginning up to the era of Christ in most of the countries. Lately, the co-operation took another form where it was agreed between the individual and the society to pay a certain sum in advance to be a member of the society.
The society by accumulating the funds, guarantees payment of certain amount at the time of loss to any member of the society. The accumulation of funds and charging of the share from the member in advance became the job of one institution called insurer.
Now it has become the duty and responsibility of the insurer to obtain adequate funds from the members of the society to pay them at the happening of the insured risk. Thus, the shares of loss took the form of premium. Today, all the insured give a premium to join the scheme of insurance. Thus, the insured are co-operating to share the loss of an individual by payment of a premium in advance.
> Principles and Theory of Probability:
This story is from the May 2023 edition of THE INSURANCE TIMES.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the May 2023 edition of THE INSURANCE TIMES.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Interview: Johnson Varughese Chief Executive Officer WALAA Insurance Company Al-Khobar, Kingdom of Saudi Arabia
\"Establishment of the IA will accelerate the growth of the Insurance Sector as the Industry will now get focused attention. The strategy of IA is likely to be aligned with Vision 2030 and Financial Sector Development plan. Since savings is one of the pillars of Vision 2030, I hope to see a lot of emphasis on Protection and Savings Insurance Products.\"
IRDAI Corner
Investments in Infrastructure Debt Funds - NBFC
2023 was a watershed year for insurance sector, but there's more to come
Innovation in regulatory framework, promotion of ease of doing business while enhancing protection of policyholders’ interests and measures taken to expand the reach of insurance penetration make 2023 a year to remember in the insurance industry.
The Future of Insurance: ESG as a Cornerstone of Sustainable Underwriting
As climate change, social inequality, and governance issues become increasingly prominent, insurers are recognizing the need to integrate Environmental, Social, and Governance ESG) factors into their underwriting processes. This shift not only aligns with global efforts to address pressing issues but also positions the insurance industry as a key player in promoting sustainability and a fraternity who is concerned about their ESG goals.
Cancer Insurance - An Indispensible cover
Recent advances in cancer treatment have opened new treatment options, such as targeted therapy and immunotherapy, for people diagnosed with advanced-stage disease. However, these advanced treatments are costly and remain out of reach of many.
Emerging Horizons: New Opportunities in Commercial General Insurance Segment
The Indian economy continues to be a beacon of growth and opportunity, attracting both domestic and foreign investments across various sectors. The country's economic reforms and ease of doing business initiatives have further improved the investment climate, fostering entrepreneurial spirit and innovation.
Interview: Dr Tarun Agarwal Director National Insurance Academy, Pune
\"National Insurance Academy is undoubtedly the most renowned institution not just in India, but internationally. We are an apex institution in the field of education, training, research and consultancy in insurance, pension and allied areas.\"
Historical Maritime Fraud
M.V B-Atlantic - War Risk Cover: An Insurer’s Dilemma or Fraud!!
Navigating the natural conundrum: Why Reinsurers continue to maintain positive outlook for non life Insurance market in asia pacific region in 2024 & beyond despite challenges posed by natural hazards
The Asia-Pacific region has long been susceptible to a range of natural hazards, including earthquakes, typhoons, floods, and tsunamis. These events pose significant challenges to the insurance industry, particularly the non-life insurance sector, which covers property, casualty, and other general insurance lines.
Trust with Law
Khaitan Legal Associates' website succinctly proclaims, \"We are a value-driven law firm.
