(2)Insurance defined from the viewpoint of the individual Insurance is an economic device whereby the individual substitutes a small certain cost(the premium) for a large uncertain financial loss( the contingency insured against) that would exist if it were not for the insurance
(2) Insurance defined from the viewpoint of the individual Insurance is an economic device whereby the individual substitutes a small certain cost (the premium) for a large uncertain financial loss (the contingency insured against) that would exist if it were not for the insurance
(3) Risk reduction through pooling The law of large numbers The larger the sample, the more accurate will be the estimate of the probability Once the estimate has been made, it must be applied to a sufficient large number of exposure units to permit the underlying probability to work itself out To make the estimate more accurate, we use variance and standard deviation The integration of inevitability and chance
(3) Risk reduction through pooling The law of large numbers The larger the sample, the more accurate will be the estimate of the probability Once the estimate has been made, it must be applied to a sufficient large number of exposure units to permit the underlying probability to work itself out To make the estimate more accurate, we use variance and standard deviation The integration of inevitability and chance
Each insured, and each class of insureds should bear the mathematically fare share of the insurance pool's losses and expenses (4)Insurance defined from the viewpoint of socle Insurance is an economic device for reducing and eliminating risk through the process of combining a sufficient number of homogeneous exposures into a group to make the losses predictable for the group as a whole
Each insured, and each class of insureds should bear the mathematically fare share of the insurance pool’s losses and expenses (4) Insurance defined from the viewpoint of society Insurance is an economic device for reducing and eliminating risk through the process of combining a sufficient number of homogeneous exposures into a group to make the losses predictable for the group as a whole
(5)Elements of an insurable risk A. There must be a sufficient large number of homogeneous exposure units to make the losses reasonably predictable B. The loss produced by the risk must be definite and measurable C the loss must be fortuitous or accidental D. The loss must not be catastrophic
(5) Elements of an insurable risk A. There must be a sufficient large number of homogeneous exposure units to make the losses reasonably predictable B. The loss produced by the risk must be definite and measurable C. The loss must be fortuitous or accidental D. The loss must not be catastrophic
(6 The fields of insurance A Private(voluntary insurance Life insurance Health insurance Property and liability insurance Including named-peril coverage and open-peril coverage B, Social insurance
(6) The fields of insurance A. Private (Voluntary) insurance Life insurance Health insurance Property and liability insurance Including named-peril coverage and open-peril coverage B. Social insurance