There are two parties in the contract of Insurance. Understand these parties and their definition in the contract of insurance. Learners will learn about the key stakeholders in the insurance business along with a classification of internal and external stakeholders.
There are two parties in the contract of Insurance:
The first party in the contract of insurance is the INSURED: Insured is a person who is looking to hedge his future risk of unforeseen losses or events. There are different types and costs of insurance policies available nowadays. The choice of the policy type depends on the insured as to what type of risk he wants a cover for.
The insured is the person in whose favor, the contract is operative and who is indemnified against or is to receive a certain sum upon the happening of a specified contingency or event. He is the person whose loss is the occasion for the payment of the insurance proceeds by the insurer.
Second-party is the INSURER: The insurer or the insurance company agrees to pay for the future financial losses of the insured against a regular payment of premium. The insurance company assumes or accepts the risk of loss and undertakes for a consideration to indemnify the insured or to pay him a certain sum on the happening of
The second party in the contract of Insurance a specified contingency or event.
The business of insurance may be carried on by individuals just as much as by corporations and associations. The state itself may go into the insurance business.
Is it always the case that the proceeds or the claim is paid to the Insured? Not always; the person paid may be the beneficiary designated in the policy. A common example of this situation is a life insurance policy where the proceeds are not given to the insured but to a third party designated by the insured.
Any person or entity interested in a particular business is called a stakeholder. They are affected by business activity, and they may be part of the core decision-making team. Many people contribute to the running of an insurance company. Aside from shareholders, the key stakeholders in the insurance value chain are:
Internal stakeholders are owners, managers, and workers. External stakeholders are the customers and suppliers. The community in which the organization does business also is a stakeholder. All the stakeholders are not equal, and different stakeholders will have varying considerations. These stakeholders can have a direct or indirect stake in the organization and in policy-making. Given below is a non-exhaustive list of internal stakeholders in the insurance industry:
External stakeholders are people who are not directly working within the business but are affected in some way from the decisions of the business. The range of external stakeholders for the insurance sector is extremely broad, and includes:
An article to explain key terms used in the Insurance Industry and Insurance Business. Also, learn about various operational and performance metrics used in the insurance domain. Learn the definition and meaning of insurance industry terms like insured, insurer, claim, reinsurance, policy, and policy premium, etc.
What is Life & Health Insurance Industry?
Insurers in this industry directly underwrite insurance policies relating to life, health, accident, and medical risks. Life and annuity insurance covers not only life and annuities but also health and disability. Read more about the health and life insurance industry. Life and health insurers generate revenue not only through the specific activity of insurance underwriting but also by investing premiums.
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Finance is the science around the management of money. Finance encompasses banking, credit, investments, assets, and liabilities. The finance function encompasses a variety of functions, activities, and processes. Finance also consists of financial systems. Acquisition, allocation, utilization, and channelizing the funds to maximize the shareholder's wealth. Finance includes public, personal, and corporate finance.
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The Business Model of Insurance Industry
The insurance industry business model can be further categorized into two types of main activities, service domain, and support domain. Service domain activities make up the company's value chain and the support domain provides the infrastructure and support to sustain the value chain. Support activities may include corporate services, finance, human resources, or information systems, and technology.
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What is General Insurance Industry?
General Insurance industry providers perform an essential function in today's economy. General insurance is typically defined as any insurance that is not determined to be life insurance. Depending on the type of occupation, risk exposure, and the money involved, the insurance could be different for each industry or business. In underwriting insurance policies, general insurers earn premiums that they further invest.
Parties in the Contract of Insurance
There are two parties in the contract of Insurance. Understand these parties and their definition in the contract of insurance. Learners will learn about the key stakeholders in the insurance business along with a classification of internal and external stakeholders.
The insurance industry classifies the different products it offers by sector. The insurance sector is made up of companies that offer risk management in the form of insurance contracts. There are four main insurance sectors: Life & Health Insurance Industry, General Insurance Industry, Specialty Insurance Industry & Reinsurance Industry. This article describes the current insurance industry sectors and their associated activities, products, and services.
The insurance industry comprises companies and people who develop insurance policies and sell, administrate, and regulate them. Insurance is a means of protection from financial loss. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. The insurance Industry manages the risk to people and businesses from the dangers of their current circumstances. Insurance policies are a safeguard against the uncertainties of life.
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