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Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to
hedge A hedge or hedgerow is a line of closely spaced shrubs and sometimes trees, planted and trained to form a barrier or to mark the boundary of an area, such as between neighbouring properties. Hedges that are used to separate a road from adjoin ...
against the risk of a contingent or uncertain loss. An entity which provides insurance is known as an insurer, insurance company, insurance carrier, or
underwriter Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...
. A person or entity who buys insurance is known as a policyholder, while a person or entity covered under the policy is called an insured. The insurance transaction involves the policyholder assuming a guaranteed, known, and relatively small loss in the form of a payment to the insurer (a premium) in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms. Furthermore, it usually involves something in which the insured has an
insurable interest Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence, without repairment or damage, of the insured object (or in the case of a person, their continued survival). A person has an ...
established by ownership, possession, or pre-existing relationship. The insured receives a
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
, called the
insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as ...
, which details the conditions and circumstances under which the insurer will compensate the insured, or their designated beneficiary or assignee. The amount of money charged by the insurer to the policyholder for the coverage set forth in the insurance policy is called the premium. If the insured experiences a loss which is potentially covered by the insurance policy, the insured submits a claim to the insurer for processing by a
claims adjuster A claims adjuster, desk adjuster, field adjuster, or general adjuster (claim adjuster, claims handler, claim handler or loss adjuster in the United Kingdom, Ireland, Australia, South Africa, the Caribbean and New Zealand) investigates insurance cla ...
. A mandatory
out-of-pocket expense An out-of-pocket expense (or out-of-pocket cost, OOP) is the direct payment of money that may or may not be later reimbursed from a third-party source. For example, when operating a vehicle, gasoline, parking fees and tolls are considered out-of ...
required by an insurance policy before an insurer will pay a claim is called a
deductible In an insurance policy, the deductible (in British English, the excess) is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses. In general usage, the term ''deductible'' may be used to describe o ...
(or if required by a
health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...
policy, a
copayment A copayment or copay (called a gap in Australian English) is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It may be defined in an insurance policy and paid by an insured person ea ...
). The insurer may
hedge A hedge or hedgerow is a line of closely spaced shrubs and sometimes trees, planted and trained to form a barrier or to mark the boundary of an area, such as between neighbouring properties. Hedges that are used to separate a road from adjoin ...
its own risk by taking out
reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
, whereby another insurance company agrees to carry some of the risks, especially if the primary insurer deems the risk too large for it to carry.


History


Early methods

Methods for transferring or distributing risk were practiced by
Babylonia Babylonia (; Akkadian: , ''māt Akkadī'') was an ancient Akkadian-speaking state and cultural area based in the city of Babylon in central-southern Mesopotamia (present-day Iraq and parts of Syria). It emerged as an Amorite-ruled state c. ...
n,
Chinese Chinese can refer to: * Something related to China * Chinese people, people of Chinese nationality, citizenship, and/or ethnicity **''Zhonghua minzu'', the supra-ethnic concept of the Chinese nation ** List of ethnic groups in China, people of ...
and
Indian Indian or Indians may refer to: Peoples South Asia * Indian people, people of Indian nationality, or people who have an Indian ancestor ** Non-resident Indian, a citizen of India who has temporarily emigrated to another country * South Asia ...
traders as long ago as the
3rd Third or 3rd may refer to: Numbers * 3rd, the ordinal form of the cardinal number 3 * , a fraction of one third * Second#Sexagesimal divisions of calendar time and day, 1⁄60 of a ''second'', or 1⁄3600 of a ''minute'' Places * 3rd Street (d ...
and 2nd
millennia A millennium (plural millennia or millenniums) is a period of one thousand years, sometimes called a kiloannum (ka), or kiloyear (ky). Normally, the word is used specifically for periods of a thousand years that begin at the starting point (ini ...
BC, respectively. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel capsizing. ''Codex Hammurabi'' Law 238 (c. 1755–1750 BC) stipulated that a
sea captain A sea captain, ship's captain, captain, master, or shipmaster, is a high-grade licensed mariner who holds ultimate command and responsibility of a merchant vessel.Aragon and Messner, 2001, p.3. The captain is responsible for the safe and efficie ...
, ship-manager, or ship charterer that saved a ship from
total loss In insurance claims, a total loss or write-off is a situation where the lost value, repair cost or salvage cost of a damaged property exceeds its insured value, and simply replacing the old property with a new equivalent is more cost-effect ...
was only required to pay one-half the value of the ship to the
ship-owner A ship-owner is the owner of a merchant vessel (commercial ship) and is involved in the shipping industry. In the commercial sense of the term, a shipowner is someone who equips and exploits a ship, usually for delivering cargo at a certain freig ...
. In the '' Digesta seu Pandectae'' (533), the second volume of the codification of laws ordered by
Justinian I Justinian I (; la, Iustinianus, ; grc-gre, Ἰουστινιανός ; 48214 November 565), also known as Justinian the Great, was the Byzantine emperor from 527 to 565. His reign is marked by the ambitious but only partly realized ''renovat ...
(527–565), a legal opinion written by the Roman jurist Paulus in 235 AD was included about the ''
Lex Rhodia Lex or LEX may refer to: Arts and entertainment * ''Lex'', a daily featured column in the ''Financial Times'' Games * Lex, the mascot of the word-forming puzzle video game ''Bookworm'' * Lex, the protagonist of the word-forming puzzle video ga ...
'' ("Rhodian law"). It articulates the
general average The law of general average is a principle of maritime law whereby all stakeholders in a sea venture proportionately share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency. For inst ...
principle of
marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
established on the island of
Rhodes Rhodes (; el, Ρόδος , translit=Ródos ) is the largest and the historical capital of the Dodecanese islands of Greece. Administratively, the island forms a separate municipality within the Rhodes regional unit, which is part of the So ...
in approximately 1000 to 800 BC, plausibly by the
Phoenicians Phoenicia () was an ancient Semitic-speaking peoples, ancient thalassocracy, thalassocratic civilization originating in the Levant region of the eastern Mediterranean, primarily located in modern Lebanon. The territory of the Phoenician city-st ...
during the proposed Dorian invasion and emergence of the purported
Sea Peoples The Sea Peoples are a hypothesized seafaring confederation that attacked ancient Egypt and other regions in the East Mediterranean prior to and during the Late Bronze Age collapse (1200–900 BCE).. Quote: "First coined in 1881 by the Fren ...
during the
Greek Dark Ages The term Greek Dark Ages refers to the period of Greek history from the end of the Mycenaean palatial civilization, around 1100 BC, to the beginning of the Archaic age, around 750 BC. Archaeological evidence shows a widespread collaps ...
(c. 1100–c. 750). The law of general average is the fundamental
principle A principle is a proposition or value that is a guide for behavior or evaluation. In law, it is a Legal rule, rule that has to be or usually is to be followed. It can be desirably followed, or it can be an inevitable consequence of something, suc ...
that underlies all insurance. In 1816, an archeological excavation in Minya, Egypt produced a
Nerva–Antonine dynasty The Nerva–Antonine dynasty comprised 7 Roman emperors who ruled from 96 to 192 AD: Nerva (96–98), Trajan (98–117), Hadrian (117–138), Antoninus Pius (138–161), Marcus Aurelius (161–180), Lucius Verus (161–169), and Commodus (180 ...
-era tablet from the ruins of the Temple of Antinous in
Antinoöpolis Antinoöpolis (also Antinoopolis, Antinoë, Antinopolis; grc, Ἀντινόου πόλις; cop, ⲁⲛⲧⲓⲛⲱⲟⲩ ''Antinow''; ar, الشيخ عبادة, modern ''Sheikh 'Ibada'' or ''Sheik Abāda'') was a city founded at an older Egyp ...
,
Aegyptus In Greek mythology, Aegyptus or Ægyptus (; grc, Αἴγυπτος) was a legendary king of ancient Egypt. He was a descendant of the princess Io through his father Belus, and of the river-god Nilus as both the father of Achiroe, his mother ...
. The tablet prescribed the rules and membership dues of a
burial society A burial society is a type of benefit/friendly society. These groups historically existed in England and elsewhere, and were constituted for the purpose of providing by voluntary subscriptions for the funeral expenses of the husband, wife or child ...
collegium A (plural ), or college, was any association in ancient Rome that acted as a legal entity. Following the passage of the ''Lex Julia'' during the reign of Julius Caesar as Consul and Dictator of the Roman Republic (49–44 BC), and their rea ...
established in
Lanuvium Lanuvium, modern Lanuvio, is an ancient city of Latium vetus, some southeast of Rome, a little southwest of the Via Appia. Situated on an isolated hill projecting south from the main mass of the Alban Hills, Lanuvium commanded an extensive view ...
,
Italia Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
in approximately 133 AD during the reign of
Hadrian Hadrian (; la, Caesar Trâiānus Hadriānus ; 24 January 76 – 10 July 138) was Roman emperor from 117 to 138. He was born in Italica (close to modern Santiponce in Spain), a Roman ''municipium'' founded by Italic settlers in Hispania B ...
(117–138) of the
Roman Empire The Roman Empire ( la, Imperium Romanum ; grc-gre, Βασιλεία τῶν Ῥωμαίων, Basileía tôn Rhōmaíōn) was the post-Republican period of ancient Rome. As a polity, it included large territorial holdings around the Mediterr ...
. In 1851 AD, future
U.S. Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...
Associate Justice Associate justice or associate judge (or simply associate) is a judicial panel member who is not the chief justice in some jurisdictions. The title "Associate Justice" is used for members of the Supreme Court of the United States and some state ...
Joseph P. Bradley Joseph Philo Bradley (March 14, 1813 – January 22, 1892) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1870 to 1892. He was also a member of the Electoral Commission that decided t ...
(1870–1892 AD), once employed as an actuary for the
Mutual Benefit Life Insurance Company The Mutual Benefit Life Insurance Company was a life insurance company that was chartered in 1845 and based in Newark in Essex County, New Jersey, United States. The company was headed by Frederick Frelinghuysen (1848–1924). The company w ...
, submitted an article to the '' Journal of the Institute of Actuaries''. His article detailed an historical account of a
Severan dynasty The Severan dynasty was a Ancient Rome, Roman imperial dynasty that ruled the Roman Empire between 193 and 235, during the Roman imperial period (chronology), Roman imperial period. The dynasty was founded by the emperor Septimius Severus (), w ...
-era
life table In actuarial science and demography, a life table (also called a mortality table or actuarial table) is a table which shows, for each age, what the probability is that a person of that age will die before their next birthday ("probability of death ...
compiled by the Roman jurist
Ulpian Ulpian (; la, Gnaeus Domitius Annius Ulpianus; c. 170223? 228?) was a Roman jurist born in Tyre. He was considered one of the great legal authorities of his time and was one of the five jurists upon whom decisions were to be based according to ...
in approximately 220 AD that was also included in the ''Digesta''. Concepts of insurance has been also found in 3rd century BC Hindu scriptures such as Dharmasastra,
Arthashastra The ''Arthashastra'' ( sa, अर्थशास्त्रम्, ) is an Ancient Indian Sanskrit treatise on statecraft, political science, economic policy and military strategy. Kautilya, also identified as Vishnugupta and Chanakya, is ...
and
Manusmriti The ''Manusmṛiti'' ( sa, मनुस्मृति), also known as the ''Mānava-Dharmaśāstra'' or Laws of Manu, is one of the many legal texts and constitution among the many ' of Hinduism. In ancient India, the sages often wrote their ...
. The ancient Greeks had marine loans. Money was advanced on a ship or cargo, to be repaid with large interest if the voyage prospers. However, the money would not be repaid at all if the ship were lost, thus making the rate of interest high enough to pay for not only for the use of the capital but also for the risk of losing it (fully described by
Demosthenes Demosthenes (; el, Δημοσθένης, translit=Dēmosthénēs; ; 384 – 12 October 322 BC) was a Greek statesman and orator in ancient Athens. His orations constitute a significant expression of contemporary Athenian intellectual prow ...
). Loans of this character have ever since been common in maritime lands under the name of
bottomry A bottomry, or bottomage, is an arrangement in which the master of a ship borrows money upon the ''bottom'' or keel of it, so as to forfeit the ship itself to the creditor, if the money with interest is not paid at the time appointed at the ship's s ...
and respondentia bonds. The direct insurance of sea-risks for a premium paid independently of loans began in
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
about 1300 AD. Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in
Genoa Genoa ( ; it, Genova ; lij, Zêna ). is the capital of the Italian region of Liguria and the List of cities in Italy, sixth-largest city in Italy. In 2015, 594,733 people lived within the city's administrative limits. As of the 2011 Italian ce ...
in the 14th century, as were insurance pools backed by pledges of landed estates. The first known insurance contract dates from Genoa in 1347. In the next century, maritime insurance developed widely, and premiums were varied with risks. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in
marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
. The earliest known policy of life insurance was made in the
Royal Exchange, London The Royal Exchange in London was founded in the 16th century by the merchant Sir Thomas Gresham on the suggestion of his factor Richard Clough to act as a centre of commerce for the City of London. The site was provided by the City of London ...
, on the 18th of June 1583, for £383, 6s. 8d. for twelve months on the life of William Gibbons.


Modern methods

Insurance became far more sophisticated in Enlightenment-era
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
, where specialized varieties developed.
Property insurance Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or bo ...
as we know it today can be traced to the
Great Fire of London The Great Fire of London was a major conflagration that swept through central London from Sunday 2 September to Thursday 6 September 1666, gutting the medieval City of London inside the old Roman city wall, while also extending past the ...
, which in 1666 devoured more than 13,000 houses. The devastating effects of the fire converted the development of insurance "from a matter of convenience into one of urgency, a change of opinion reflected in Sir
Christopher Wren Sir Christopher Wren PRS FRS (; – ) was one of the most highly acclaimed English architects in history, as well as an anatomist, astronomer, geometer, and mathematician-physicist. He was accorded responsibility for rebuilding 52 churches ...
's inclusion of a site for "the Insurance Office" in his new plan for London in 1667." A number of attempted fire insurance schemes came to nothing, but in 1681,
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
Nicholas Barbon Nicholas Barbon ( 1640 – 1698) was an English economist, physician, and financial speculator. Historians of mercantilism consider him to be one of the first proponents of the free market. In the aftermath of the Great Fire of London, he be ...
and eleven associates established the first fire insurance company, the "Insurance Office for Houses", at the back of the Royal Exchange to insure brick and frame homes. Initially, 5,000 homes were insured by his Insurance Office. At the same time, the first insurance schemes for the
underwriting Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...
of
business venture Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...
s became available. By the end of the seventeenth century, London's growth as a centre for trade was increasing due to the demand for
marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
. In the late 1680s, Edward Lloyd opened a coffee house, which became the meeting place for parties in the shipping industry wishing to insure cargoes and ships, including those willing to underwrite such ventures. These informal beginnings led to the establishment of the insurance market
Lloyd's of London Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gov ...
and several related shipping and insurance businesses.
Life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
policies were taken out in the early 18th century. The first company to offer life insurance was the
Amicable Society for a Perpetual Assurance Office Amicable Society for a Perpetual Assurance Office (a.k.a. "Amicable Society") is considered the first life insurance company in the world.Anzovin, p. 121 ''The first life insurance company known of record was founded in 1706 by the Bishop of Oxfo ...
, founded in London in 1706 by William Talbot and Sir Thomas Allen.Anzovin, Steven, ''Famous First Facts'' 2000, item # 2422, H. W. Wilson Company, p. 121 ''The first life insurance company known of record was founded in 1706 by the Bishop of Oxford and the financier Thomas Allen in London, England. The company, called the Amicable Society for a Perpetual Assurance Office, collected annual premiums from policyholders and paid the nominees of deceased members from a common fund.'' Upon the same principle,
Edward Rowe Mores Edward Rowe Mores, FSA (; 24 January 1731 Old_Style_and_New_Style_dates">OS:_13_January_1730.html" ;"title="Old_Style_and_New_Style_dates.html" ;"title="/nowiki>OS:_13_January_1730">Old_Style_and_New_Style_dates.html"_;"title="/nowiki>Old_St ...
established the Society for Equitable Assurances on Lives and Survivorship in 1762. It was the world's first
mutual insurer A mutual insurance company is an insurance company owned entirely by its policyholders. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or re ...
and it pioneered age based premiums based on
mortality rate Mortality rate, or death rate, is a measure of the number of deaths (in general, or due to a specific cause) in a particular population, scaled to the size of that population, per unit of time. Mortality rate is typically expressed in units of de ...
laying "the framework for scientific insurance practice and development" and "the basis of modern life assurance upon which all life assurance schemes were subsequently based." In the late 19th century "accident insurance" began to become available. The first company to offer accident insurance was the Railway Passengers Assurance Company, formed in 1848 in England to insure against the rising number of fatalities on the nascent
railway Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...
system. The first international insurance rule was the York Antwerp Rules (YAR) for the distribution of costs between ship and cargo in the event of general average. In 1873 the "Association for the Reform and Codification of the Law of Nations", the forerunner of the
International Law Association The International Law Association (ILA) is a non-profit organisation based in Great Britain that — according to its constitution — promotes "the study, clarification and development of international law" and "the furtherance of international ...
(ILA), was founded in Brussels. It published the first YAR in 1890, before switching to the present title of the "International Law Association" in 1895. By the late 19th century governments began to initiate national insurance programs against sickness and old age.
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
built on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s Chancellor
Otto von Bismarck Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (, ; 1 April 1815 – 30 July 1898), born Otto Eduard Leopold von Bismarck, was a conservative German statesman and diplomat. From his origins in the upper class of J ...
introduced old age pensions, accident insurance and medical care that formed the basis for Germany's
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
.E. P. Hennock, ''The Origin of the Welfare State in England and Germany, 1850–1914: Social Policies Compared'' (2007) In Britain more extensive legislation was introduced by the
Liberal Liberal or liberalism may refer to: Politics * a supporter of liberalism ** Liberalism by country * an adherent of a Liberal Party * Liberalism (international relations) * Sexually liberal feminism * Social liberalism Arts, entertainment and m ...
government in the
1911 National Insurance Act The National Insurance Act 1911 created National Insurance, originally a system of health insurance for industrial workers in Great Britain based on contributions from employers, the government, and the workers themselves. It was one of the foun ...
. This gave the British working classes the first contributory system of insurance against illness and unemployment. This system was greatly expanded after the
Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
under the influence of the
Beveridge Report The Beveridge Report, officially entitled ''Social Insurance and Allied Services'' (Command paper, Cmd. 6404), is a government report, published in November 1942, influential in the founding of the welfare state in the United Kingdom. It was draft ...
, to form the first modern
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
. In 2008, the International Network of Insurance Associations (INIA), then an informal network, became active and it has been succeeded by the
Global Federation of Insurance Associations Global means of or referring to a globe and may also refer to: Entertainment * Global (Paul van Dyk album), ''Global'' (Paul van Dyk album), 2003 * Global (Bunji Garlin album), ''Global'' (Bunji Garlin album), 2007 * Global (Humanoid album), ''Gl ...
(GFIA), which was formally founded in 2012 to aim to increase insurance industry effectiveness in providing input to international regulatory bodies and to contribute more effectively to the international dialogue on issues of common interest. It consists of its 40 member associations and 1 observer association in 67 countries, which companies account for around 89% of total insurance premiums worldwide.


Principles

Insurance involves pooling funds from ''many'' insured entities (known as exposures) to pay for the losses that only some insureds may incur. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be an
insurable risk Insurability can mean either whether a particular type of loss (risk) can be insured in theory, or whether a particular client is insurable for by a particular company because of particular circumstance and the quality assigned by an insurance p ...
, the risk insured against must meet certain characteristics. Insurance as a
financial intermediary A financial intermediary is an institution or individual that serves as a middleman among diverse parties in order to facilitate financial transactions. Common types include commercial banks, investment banks, stockbrokers, pooled investment funds ...
is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.


Insurability

Risk which can be insured by private companies typically share seven common characteristics: # Large number of similar exposure units: Since insurance operates through pooling resources, the majority of insurance policies cover individual members of large classes, allowing insurers to benefit from the law of large numbers in which predicted losses are similar to the actual losses. Exceptions include
Lloyd's of London Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gov ...
, which is famous for insuring the life or health of actors, sports figures, and other famous individuals. However, all exposures will have particular differences, which may lead to different premium rates. # Definite loss: This type of loss takes place at a known time and place from a known cause. The classic example involves the death of an insured person on a life-insurance policy.
Fire Fire is the rapid oxidation of a material (the fuel) in the exothermic chemical process of combustion, releasing heat, light, and various reaction Product (chemistry), products. At a certain point in the combustion reaction, called the ignition ...
, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory.
Occupational disease An occupational disease is any chronic ailment that occurs as a result of work or occupational activity. It is an aspect of occupational safety and health. An occupational disease is typically identified when it is shown that it is more prevale ...
, for instance, may involve prolonged exposure to injurious conditions where no specific time, place, or cause is identifiable. Ideally, the time, place, and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements. # Accidental loss: The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements such as ordinary business risks or even purchasing a lottery ticket are generally not considered insurable. # Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer. # Affordable premium: If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, then it is not likely that insurance will be purchased, even if on offer. Furthermore, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, then the transaction may have the form of insurance, but not the substance (see the U.S.
Financial Accounting Standards Board The Financial Accounting Standards Board (FASB) is a private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securi ...
pronouncement number 113: "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts"). # Calculable loss: There are two elements that must be at least estimable, if not formally calculable: the probability of loss and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. # Limited risk of catastrophically large losses: Insurable losses are ideally independent and non-catastrophic, meaning that the losses do not happen all at once and that individual losses are not severe enough to bankrupt the insurer; insurers may prefer to limit their exposure to a loss from a single event to some small portion of their capital base.
Capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...
constrains insurers' ability to sell
earthquake insurance Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insuranc ...
as well as wind insurance in hurricane zones. In the United States, the federal government insures
flood risk A flood is an overflow of water ( or rarely other fluids) that submerges land that is usually dry. In the sense of "flowing water", the word may also be applied to the inflow of the tide. Floods are an area of study of the discipline hydrolog ...
in specifically identified areas. In commercial fire insurance, it is possible to find single properties whose total exposed value is well in excess of any individual insurer's capital constraint. Such properties are generally shared among several insurers or are insured by a single insurer which syndicates the risk into the
reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
market.


Legal

When a company insures an individual entity, there are basic legal requirements and regulations. Several commonly cited legal principles of insurance include: #
Indemnity In contract law, an indemnity is a contractual obligation of one party (the ''indemnitor'') to compensate the loss incurred by another party (the ''indemnitee'') due to the relevant acts of the indemnitor or any other party. The duty to indemni ...
– the insurance company indemnifies or compensates the insured in the case of certain losses only up to the insured's interest. # Benefit insurance – as it is stated in the study books of The Chartered Insurance Institute, the insurance company does not have the right of recovery from the party who caused the injury and must compensate the Insured regardless of the fact that Insured had already sued the negligent party for the damages (for example, personal accident insurance) #
Insurable interest Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence, without repairment or damage, of the insured object (or in the case of a person, their continued survival). A person has an ...
– the insured typically must directly suffer from the loss. Insurable interest must exist whether property insurance or insurance on a person is involved. The concept requires that the insured have a "stake" in the loss or damage to the life or property insured. What that "stake" is will be determined by the kind of insurance involved and the nature of the property ownership or relationship between the persons. The requirement of an insurable interest is what distinguishes insurance from
gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...
. # Utmost good faith – (
Uberrima fides ''Uberrima fides'' (sometimes seen in its genitive form ''uberrimae fidei'') is a Latin phrase meaning "utmost good faith" (literally, "most abundant faith"). It is the name of a legal doctrine which governs insurance contracts. This means that a ...
) the insured and the insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed. # Contribution – insurers, which have similar obligations to the insured, contribute in the indemnification, according to some method. # Subrogation – the insurance company acquires legal rights to pursue recoveries on behalf of the insured; for example, the insurer may sue those liable for the insured's loss. The Insurers can waive their subrogation rights by using the special clauses. # Causa proxima, or
proximate cause In law and insurance, a proximate cause is an event sufficiently related to an injury that the courts deem the event to be the cause of that injury. There are two types of causation in the law: cause-in-fact, and proximate (or legal) cause. Ca ...
– the cause of loss (the peril) must be covered under the insuring agreement of the policy, and the dominant cause must not be excluded # Mitigation – In case of any loss or casualty, the asset owner must attempt to keep loss to a minimum, as if the asset was not insured.


Indemnification

To "indemnify" means to make whole again, or to be reinstated to the position that one was in, to the extent possible, prior to the happening of a specified event or peril. Accordingly,
life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
is generally not considered to be indemnity insurance, but rather "contingent" insurance (i.e., a claim arises on the occurrence of a specified event). There are generally three types of insurance contracts that seek to indemnify an insured: # A "reimbursement" policy # A "pay on behalf" or "on behalf of policy"C. Kulp & J. Hall, Casualty Insurance, Fourth Edition, 1968, page 35 # An "indemnification" policy From an insured's standpoint, the result is usually the same: the insurer pays the loss and claims expenses. If the Insured has a "reimbursement" policy, the insured can be required to pay for a loss and then be "reimbursed" by the insurance carrier for the loss and out of pocket costs including, with the permission of the insurer, claim expenses. Under a "pay on behalf" policy, the insurance carrier would defend and pay a claim on behalf of the insured who would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language, which enables the insurance carrier to manage and control the claim. Under an "indemnification" policy, the insurance carrier can generally either "reimburse" or "pay on behalf of", whichever is more beneficial to it and the insured in the claim handling process. An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the "insured" party once risk is assumed by an "insurer", the insuring party, by means of a
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
, called an
insurance policy In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as ...
. Generally, an insurance contract includes, at a minimum, the following elements: identification of participating parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be " indemnified" against the loss covered in the policy. When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a claim against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the premium. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims – in theory for a relatively few claimants – and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (called reserves), the remaining margin is an insurer's profit.


Exclusions

Policies typically include a number of exclusions, for example: *
Nuclear exclusion clause The nuclear exclusion clause is a clause which excludes damage caused by nuclear and radiation accidents from regular insurance policies of, for example, home owners. : Example: ''Notwithstanding anything to the contrary herein, it is hereby und ...
, excluding damage caused by nuclear and radiation accidents * War exclusion clause, excluding damage from acts of war or terrorism. Insurers may prohibit certain activities which are considered dangerous and therefore excluded from coverage. One system for classifying activities according to whether they are authorised by insurers refers to "green light" approved activities and events, "yellow light" activities and events which require insurer consultation and/or waivers of liability, and "red light" activities and events which are prohibited and outside the scope of insurance cover.


Social effects

Insurance can have various effects on society through the way that it changes who bears the cost of losses and damage. On one hand it can increase fraud; on the other it can help societies and individuals prepare for catastrophes and mitigate the effects of catastrophes on both households and societies. Insurance can influence the probability of losses through
moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk ...
,
insurance fraud Insurance fraud is any act committed to defraud an insurance process. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. According to the ...
, and preventive steps by the insurance company. Insurance scholars have typically used
moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk ...
to refer to the increased loss due to unintentional carelessness and insurance fraud to refer to increased risk due to intentional carelessness or indifference. Insurers attempt to address carelessness through inspections, policy provisions requiring certain types of maintenance, and possible discounts for loss mitigation efforts. While in theory insurers could encourage investment in loss reduction, some commentators have argued that in practice insurers had historically not aggressively pursued loss control measures—particularly to prevent disaster losses such as hurricanes—because of concerns over rate reductions and legal battles. However, since about 1996 insurers have begun to take a more active role in loss mitigation, such as through
building code A building code (also building control or building regulations) is a set of rules that specify the standards for constructed objects such as buildings and non-building structures. Buildings must conform to the code to obtain planning permission ...
s.


Methods of insurance

According to the study books of The Chartered Insurance Institute, there are variant methods of insurance as follows: # Co-insurance – risks shared between insurers (sometimes referred to as "Retention") # Dual insurance – having two or more policies with overlapping coverage of a risk (both the individual policies would not pay separately – under a concept named contribution, they would contribute together to make up the policyholder's losses. However, in case of contingency insurances such as life insurance, dual payment is allowed) # Self-insurance – situations where risk is not transferred to insurance companies and solely retained by the entities or individuals themselves # Reinsurance – situations when the insurer passes some part of or all risks to another Insurer, called the reinsurer


Insurers' business model

Insurers may use the
subscription business model The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a product or service. The model was pioneered by publishers of books and periodicals in the 17th century, an ...
, collecting premium payments periodically in return for on-going and/or
compounding In the field of pharmacy, compounding (performed in compounding pharmacies) is preparation of a custom formulation of a medication to fit a unique need of a patient that cannot be met with commercially available products. This may be done for me ...
benefits offered to policyholders.


Underwriting and investing

Insurers' business model aims to collect more in premium and investment income than is paid out in losses, and to also offer a competitive price which consumers will accept. Profit can be reduced to a simple equation: :Profit =
earned premium An insurance policy may be canceled before the end of the policy period. This has the effect of ending the policy coverage on the date of the policy cancellation. Cancellation methods Three different calculation methods are commonly used. Cancell ...
+ investment income – incurred loss – underwriting expenses. Insurers make money in two ways: * Through
underwriting Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...
, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks, and taking the brunt of the risk should it come to fruition. * By
investing Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
the premiums they collect from insured parties The most complicated aspect of insuring is the actuarial science of ratemaking (price-setting) of policies, which uses
statistics Statistics (from German language, German: ''wikt:Statistik#German, Statistik'', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of ...
and
probability Probability is the branch of mathematics concerning numerical descriptions of how likely an Event (probability theory), event is to occur, or how likely it is that a proposition is true. The probability of an event is a number between 0 and ...
to approximate the rate of future claims based on a given risk. After producing rates, the insurer will use discretion to reject or accept risks through the underwriting process. At the most basic level, initial rate-making involves looking at the
frequency Frequency is the number of occurrences of a repeating event per unit of time. It is also occasionally referred to as ''temporal frequency'' for clarity, and is distinct from ''angular frequency''. Frequency is measured in hertz (Hz) which is eq ...
and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss-data, bring the loss data to
present value In economics and finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money has inte ...
, and compare these prior losses to the premium collected in order to assess rate adequacy.
Loss ratio A loss ratio is a ratio of losses to gains, used normally in a financial context. It is the opposite of the gross profit ratio (commonly known as the ''gross profit margin''). Insurance loss ratio For insurance, the loss ratio is the ratio of tot ...
s and expense loads are also used. Rating for different risk characteristics involves - at the most basic level - comparing the losses with "loss relativities"—a policy with twice as many losses would, therefore, be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses. Upon termination of a given policy, the amount of premium collected minus the amount paid out in claims is the insurer's underwriting profit on that policy. Underwriting performance is measured by something called the "combined ratio", which is the ratio of expenses/losses to premiums. A combined ratio of less than 100% indicates an underwriting profit, while anything over 100 indicates an underwriting loss. A company with a combined ratio over 100% may nevertheless remain profitable due to investment earnings. Insurance companies earn
investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing i ...
profits on "float". Float, or available reserve, is the amount of money on hand at any given moment that an insurer has collected in insurance premiums but has not paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest or other income on them until claims are paid out. The
Association of British Insurers The Association of British Insurers or ABI is a trade association made up of insurance companies in the United Kingdom. History The ABI began in 1985 after several specialised insurance industry trade associations joined to form one trade associa ...
(grouping together 400 insurance companies and 94% of UK insurance services) has almost 20% of the investments in the
London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pau ...
. In 2007, U.S. industry profits from float totaled $58 billion. In a 2009 letter to investors, Warren Buffett wrote, "we were ''paid'' $2.8 billion to hold our float in 2008". In the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, the underwriting loss of
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
and
casualty insurance Casualty insurance is a defined term which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Casualty insurance is mainly liability coverage of an individual or organization for ne ...
companies was $142.3 billion in the five years ending 2003. But overall profit for the same period was $68.4 billion, as the result of float. Some insurance-industry insiders, most notably
Hank Greenberg Henry Benjamin Greenberg (born Hyman Greenberg; January 1, 1911 – September 4, 1986), nicknamed "Hammerin' Hank", "Hankus Pankus", or "The Hebrew Hammer", was an American professional baseball player and team executive. He played in Major Leagu ...
, do not believe that it is possible to sustain a profit from float forever without an underwriting profit as well, but this opinion is not universally held. Reliance on float for profit has led some industry experts to call insurance companies "investment companies that raise the money for their investments by selling insurance". Naturally, the float method is difficult to carry out in an economically depressed period.
Bear market A market trend is a perceived tendency of financial markets to move in a particular direction over time. Analysts classify these trends as ''secular'' for long time-frames, ''primary'' for medium time-frames, and ''secondary'' for short time-fram ...
s do cause insurers to shift away from investments and to toughen up their underwriting standards, so a poor economy generally means high insurance-premiums. This tendency to swing between profitable and unprofitable periods over time is commonly known as the underwriting, or insurance, cycle.


Claims

Claims and loss handling is the materialized utility of insurance; it is the actual "product" paid for. Claims may be filed by insureds directly with the insurer or through brokers or agents. The insurer may require that the claim be filed on its own proprietary forms, or may accept claims on a standard industry form, such as those produced by
ACORD The Association for Cooperative Operations Research and Development (ACORD) is a non-profit organization in the insurance industry. ACORD publishes and maintains an archive of standardized forms. ACORD has also developed a comprehensive library of ...
. Insurance company claims departments employ a large number of
claims adjuster A claims adjuster, desk adjuster, field adjuster, or general adjuster (claim adjuster, claims handler, claim handler or loss adjuster in the United Kingdom, Ireland, Australia, South Africa, the Caribbean and New Zealand) investigates insurance cla ...
s supported by a staff of records management and
data entry clerk A data entry clerk, also known as data preparation and control operator, data registration and control operator, and data preparation and registration operator, is a member of staff employed to enter or update data into a computer system. Data is o ...
s. Incoming claims are classified based on severity and are assigned to adjusters whose settlement authority varies with their knowledge and experience. The adjuster undertakes an investigation of each claim, usually in close cooperation with the insured, determines if coverage is available under the terms of the insurance contract, and if so, the reasonable monetary value of the claim, and authorizes payment. The policyholder may hire their own
public adjuster A public adjuster is a professional claims handler/claims adjuster who represents the insured/policyholder in their insurance claim. Depending on the state, licensed public adjusters are required to prove competency in a variety of ways; written e ...
to negotiate the settlement with the insurance company on their behalf. For policies that are complicated, where claims may be complex, the insured may take out a separate insurance policy add-on, called loss recovery insurance, which covers the cost of a public adjuster in the case of a claim. Adjusting liability insurance claims is particularly difficult because there is a third party involved, the
plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of the p ...
, who is under no contractual obligation to cooperate with the insurer and may in fact regard the insurer as a
deep pocket Deep pocket is an American slang term; it usually means "extensive financial wealth or resources". It is typically used in reference to big companies or organizations (ex: the American tobacco companies have "deep pockets"), although it can be us ...
. The adjuster must obtain legal counsel for the insured (either inside "house" counsel or outside "panel" counsel), monitor litigation that may take years to complete, and appear in person or over the telephone with settlement authority at a mandatory settlement conference when requested by the judge. If a claims adjuster suspects under-insurance, the
condition of average Condition of average (also called ''underinsurance'' in the U.S., or ''principle of average'', ''subject to average'', or ''pro rata condition of average'' in Commonwealth countries) is the insurance term used when calculating a payout against a ...
may come into play to limit the insurance company's exposure. In managing the claims handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome. Disputes between insurers and insureds over the validity of claims or claims handling practices occasionally escalate into litigation (see
insurance bad faith Insurance bad faith is a tort unique to the law of the United States (but with parallels elsewhere, particularly Canada) that an insurance company commits by violating the "implied covenant of good faith and fair dealing" which automatically exis ...
).


Marketing

Insurers will often use
insurance agents An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation. An insurance broker is distinct from an insurance agent in that a broker typically acts on behalf of a client by negotia ...
to initially market or
underwrite Underwriting (UW) services are provided by some large financial institutions, such as banks, insurance companies and investment houses, whereby they guarantee payment in case of damage or financial loss and accept the financial risk for liabilit ...
their customers. Agents can be captive, meaning they write only for one company, or independent, meaning that they can issue policies from several companies. The existence and success of companies using insurance agents is likely due to the availability of improved and personalised services. Companies also use Broking firms, Banks and other corporate entities (like Self Help Groups, Microfinance Institutions, NGOs, etc.) to market their products.


Types

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as perils. An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are non-exhaustive lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example,
vehicle insurance Vehicle insurance (also known as car insurance, motor insurance, or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injury ...
would typically cover both the property risk (theft or damage to the vehicle) and the liability risk (legal claims arising from an
accident An accident is an unintended, normally unwanted event that was not directly caused by humans. The term ''accident'' implies that nobody should be blamed, but the event may have been caused by unrecognized or unaddressed risks. Most researche ...
). A
home insurance Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...
policy in the United States typically includes coverage for damage to the home and the owner's belongings, certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property.
Business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
insurance can take a number of different forms, such as the various kinds of professional liability insurance, also called professional indemnity (PI), which are discussed below under that name; and the
business owner's policy A business owner's policy (also businessowner's policy, business owners policy or BOP) is a special type of commercial insurance designed for small and medium-sized businesses. By bundling general liability insurance and property insurance into a s ...
(BOP), which packages into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners' insurance packages the coverages that a homeowner needs.


Vehicle insurance

Vehicle insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as in a traffic collision. Coverage typically includes: * Property coverage, for damage to or theft of the car * Liability coverage, for the legal responsibility to others for bodily injury or property damage * Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses


Gap insurance

Gap insurance covers the excess amount on an auto loan in an instance where the policyholder's insurance company does not cover the entire loan. Depending on the company's specific policies it might or might not cover the deductible as well. This coverage is marketed for those who put low
down payment Down payment (also called a deposit in British English), is an initial up-front partial payment for the purchase of expensive items/services such as a car or a house. It is usually paid in cash or equivalent at the time of finalizing the transactio ...
s, have high interest rates on their loans, and those with 60-month or longer terms. Gap insurance is typically offered by a finance company when the vehicle owner purchases their vehicle, but many auto insurance companies offer this coverage to consumers as well.


Health insurance

Health insurance policies cover the cost of medical treatments. Dental insurance, like medical insurance, protects policyholders for dental costs. In most developed countries, all citizens receive some health coverage from their governments, paid through taxation. In most countries, health insurance is often part of an employer's benefits.


Income protection insurance

* Disability insurance policies provide financial support in the event of the policyholder becoming unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as
mortgage loan A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any p ...
s and
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
s. Short-term and long-term disability policies are available to individuals, but considering the expense, long-term policies are generally obtained only by those with at least six-figure incomes, such as doctors, lawyers, etc. Short-term disability insurance covers a person for a period typically up to six months, paying a stipend each month to cover medical bills and other necessities. * Long-term disability insurance covers an individual's expenses for the long term, up until such time as they are considered permanently disabled and thereafter Insurance companies will often try to encourage the person back into employment in preference to and before declaring them unable to work at all and therefore totally disabled. * Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. *
Total permanent disability insurance Total Permanent Disability ''(TPD)'' is a phrase used in the insurance industry and in law. Generally speaking, it means that because of a sickness or injury, a person is unable to work in their own or any occupation for which they are suited by tr ...
provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. *
Workers' compensation Workers' compensation or workers' comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her emp ...
insurance replaces all or part of a worker's
wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remune ...
s lost and accompanying medical expenses incurred because of a job-related injury.


Casualty insurance

Casualty insurance insures against accidents, not necessarily tied to any specific property. It is a broad spectrum of insurance that a number of other types of insurance could be classified, such as auto, workers compensation, and some liability insurances. * Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the
criminal act In ordinary language, a crime is an unlawful act punishable by a state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally accepted definition,Farmer, Lindsay: "Crime, definitions of", in Ca ...
s of third parties. For example, a company can obtain crime insurance to cover losses arising from
theft Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for some ...
or
embezzlement Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...
. *
Terrorism insurance Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities. It is considered to be a difficult product for insurance companies, as the odds of terroris ...
provides protection against any loss or damage caused by
terrorist Terrorism, in its broadest sense, is the use of criminal violence to provoke a state of terror or fear, mostly with the intention to achieve political or religious aims. The term is used in this regard primarily to refer to intentional violen ...
activities. In the United States in the wake of 9/11, the
Terrorism Risk Insurance Act The Terrorism Risk Insurance Act (TRIA) (, ) is a United States federal law signed into law by President George W. Bush on November 26, 2002. The Act created a federal "backstop" for insurance claims related to acts of terrorism. The Act "prov ...
2002 (TRIA) set up a federal program providing a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism. The program was extended until the end of 2014 by the Terrorism Risk Insurance Program Reauthorization Act 2007 (TRIPRA). *
Kidnap and ransom insurance Kidnap and ransom insurance or K&R insurance is designed to protect individuals and corporations operating in high-risk areas around the world. Locations most often named in policies include Mexico, Venezuela, Haiti, and Nigeria, certain other coun ...
is designed to protect individuals and corporations operating in high-risk areas around the world against the perils of kidnap, extortion, wrongful detention and hijacking. *
Political risk insurance Political risk insurance is a type of insurance that can be taken out by businesses, of any size, against political risk—the risk that revolution or other political conditions will result in a loss. Political risk insurance is available for seve ...
is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that
revolution In political science, a revolution (Latin: ''revolutio'', "a turn around") is a fundamental and relatively sudden change in political power and political organization which occurs when the population revolts against the government, typically due ...
or other
political Politics (from , ) is the set of activities that are associated with making decisions in groups, or other forms of power relations among individuals, such as the distribution of resources or status. The branch of social science that studies ...
conditions could result in a loss.


Life insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an
annuity In investment, an annuity is a series of payments made at equal intervals.Kellison, Stephen G. (1970). ''The Theory of Interest''. Homewood, Illinois: Richard D. Irwin, Inc. p. 45 Examples of annuities are regular deposits to a savings account, ...
. In most states, a person cannot purchase a policy on another person without their knowledge. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and
pension A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
s that pay a benefit for life are sometimes regarded as insurance against the possibility that a
retiree A pensioner is a person who receives a pension, most commonly because of retirement from the workforce. This is a term typically used in the United Kingdom (along with OAP, initialism of old-age pensioner), Ireland and Australia where someone of p ...
will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate
cash In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-imm ...
values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and
endowment policies An endowment policy is a life insurance contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies also pay out in the ...
, are financial instruments to accumulate or
liquidate Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistr ...
wealth Wealth is the abundance of Value (economics), valuable financial assets or property, physical possessions which can be converted into a form that can be used for financial transaction, transactions. This includes the core meaning as held in the ...
when it is needed. In many countries, such as the United States and the UK, the
tax law Tax law or revenue law is an area of legal study in which public or sanctioned authorities, such as federal, state and municipal governments (as in the case of the US) use a body of rules and procedures (laws) to assess and collect taxes in a ...
provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of
saving Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recur ...
as well as protection in the event of early death. In the United States, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from
tax deferral Tax deferral refers to instances where a taxpayer can delay paying taxes to some future period. In theory, the net taxes paid should be the same. Taxes can sometimes be deferred indefinitely, or may be taxed at a lower rate in the future, particular ...
may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation.


Burial insurance

Burial insurance is an old type of life insurance which is paid out upon death to cover final expenses, such as the cost of a
funeral A funeral is a ceremony connected with the final disposition of a corpse, such as a burial or cremation, with the attendant observances. Funerary customs comprise the complex of beliefs and practices used by a culture to remember and respect th ...
. The
Greeks The Greeks or Hellenes (; el, Έλληνες, ''Éllines'' ) are an ethnic group and nation indigenous to the Eastern Mediterranean and the Black Sea regions, namely Greece, Cyprus, Albania, Italy, Turkey, Egypt, and, to a lesser extent, oth ...
and
Romans Roman or Romans most often refers to: *Rome, the capital city of Italy * Ancient Rome, Roman civilization from 8th century BC to 5th century AD *Roman people, the people of ancient Rome *''Epistle to the Romans'', shortened to ''Romans'', a lette ...
introduced burial insurance c. 600 CE when they organized
guild A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular area. The earliest types of guild formed as organizations of tradesmen belonging to a professional association. They sometimes ...
s called "benevolent societies" which cared for the surviving families and paid funeral expenses of members upon death. Guilds in the
Middle Ages In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the post-classical period of global history. It began with the fall of the Western Roman Empire a ...
served a similar purpose, as did friendly societies during Victorian times.


Property

Property insurance provides protection against risks to property, such as
fire Fire is the rapid oxidation of a material (the fuel) in the exothermic chemical process of combustion, releasing heat, light, and various reaction Product (chemistry), products. At a certain point in the combustion reaction, called the ignition ...
,
theft Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for some ...
or
weather Weather is the state of the atmosphere, describing for example the degree to which it is hot or cold, wet or dry, calm or stormy, clear or cloudy. On Earth, most weather phenomena occur in the lowest layer of the planet's atmosphere, the ...
damage. This may include specialized forms of insurance such as fire insurance,
flood insurance Flood insurance is the specific insurance coverage issued against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and other areas tha ...
,
earthquake insurance Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insuranc ...
,
home insurance Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...
, inland marine insurance or
boiler insurance Boiler insurance (Boiler cover) is a type of insurance that covers repairs and in some instances, the replacement of a home boiler. It can also cover other parts of the central heating A central heating system provides warmth to a number of ...
. The term ''property insurance'' may, like casualty insurance, be used as a broad category of various subtypes of insurance, some of which are listed below: *
Aviation insurance Aviation insurance is insurance coverage geared specifically to the operation of aircraft and the risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporate ...
protects
aircraft An aircraft is a vehicle that is able to fly by gaining support from the air. It counters the force of gravity by using either static lift or by using the dynamic lift of an airfoil, or in a few cases the downward thrust from jet engines ...
hulls and spares, and associated liability risks, such as passenger and third-party liability.
Airport An airport is an aerodrome with extended facilities, mostly for commercial air transport. Airports usually consists of a landing area, which comprises an aerially accessible open space including at least one operationally active surface ...
s may also appear under this subcategory, including air traffic control and refuelling operations for international airports through to smaller domestic exposures. *
Boiler insurance Boiler insurance (Boiler cover) is a type of insurance that covers repairs and in some instances, the replacement of a home boiler. It can also cover other parts of the central heating A central heating system provides warmth to a number of ...
(also known as boiler and machinery insurance, or equipment breakdown insurance) insures against accidental physical damage to boilers, equipment or machinery. *
Builder's risk insurance Builder's risk insurance (Contractor's All Risk insurance – CAR insurance) is a special type of property insurance which indemnifies against damage to buildings while they are under construction. Builder's risk insurance is "coverage that pro ...
insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage arising from any cause (including the negligence of the insured) not otherwise expressly excluded. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from an insured peril. *
Crop insurance Crop insurance is purchased by agricultural producers, and subsidized by the federal government, to protect against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines ...
may be purchased by farmers to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, pests (including especially insects), or disease - some of these being termed named perils.
Index-based insurance Index-based insurance, also known as index-linked insurance or, simply, index insurance, is primarily used in agriculture. Because of the high cost of assessing losses, traditional insurance based on paying indemnities for actual losses incurred i ...
uses models of how climate extremes affect crop production to define certain climate triggers that if surpassed have high probabilities of causing substantial crop loss. When harvest losses occur associated with exceeding the climate trigger threshold, the index-insured farmer is entitled to a compensation payment. *
Earthquake insurance Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insuranc ...
is a form of property insurance that pays the policyholder in the event of an
earthquake An earthquake (also known as a quake, tremor or temblor) is the shaking of the surface of the Earth resulting from a sudden release of energy in the Earth's lithosphere that creates seismic waves. Earthquakes can range in intensity, from ...
that causes damage to the property. Most ordinary home insurance policies do not cover earthquake damage. Earthquake insurance policies generally feature a high
deductible In an insurance policy, the deductible (in British English, the excess) is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses. In general usage, the term ''deductible'' may be used to describe o ...
. Rates depend on location and hence the likelihood of an earthquake, as well as the construction of the home. *
Fidelity bond A fidelity bond or fidelity guarantee is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest ...
is a form of casualty insurance that covers policyholders for losses incurred as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees. *
Flood insurance Flood insurance is the specific insurance coverage issued against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands, floodplains and other areas tha ...
protects against property loss due to flooding. Many U.S. insurers do not provide flood insurance in some parts of the country. In response to this, the federal government created the
National Flood Insurance Program The National Flood Insurance Program (NFIP) is a program created by the Congress of the United States in 1968 through the National Flood Insurance Act of 1968 (P.L. 90-448). The NFIP has two purposes: to share the risk of flood losses through flo ...
which serves as the insurer of last resort. *
Home insurance Home insurance, also commonly called homeowner's insurance (often abbreviated in the US real estate industry as HOI), is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insura ...
, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake, that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets. * Landlord insurance covers residential or commercial property that is rented to tenants. It also covers the landlord's liability for the occupants at the property. Most homeowners' insurance, meanwhile, cover only owner-occupied homes and not liability or damages related to tenants. *
Marine insurance Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch o ...
and marine cargo insurance cover the loss or damage of vessels at sea or on
inland waterways Inland navigation, inland barge transport or inland waterway transport (IWT) is a transport system allowing ships and barges to use inland waterways (such as canals, rivers and lakes). These waterways have inland ports, marinas, quays, and wharfs. ...
, and of cargo in transit, regardless of the method of transit. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss. *
Renters' insurance Renters' insurance, often called tenants' insurance, is an insurance policy that provides some of the benefits of homeowners' insurance, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a ten ...
, often called tenants' insurance, is an insurance policy that provides some of the benefits of homeowners' insurance, but does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. * Supplemental natural disaster insurance covers specified expenses after a natural disaster renders the policyholder's home uninhabitable. Periodic payments are made directly to the insured until the home is rebuilt or a specified time period has elapsed. * Surety bond insurance is a three-party insurance guaranteeing the performance of the principal. * Volcano insurance is a specialized insurance protecting against damage arising specifically from
volcanic eruptions Several types of volcanic eruptions—during which lava, tephra (ash, lapilli, volcanic bombs and volcanic blocks), and assorted gases are expelled from a volcanic vent or fissure—have been distinguished by volcanologists. These are often ...
. * Windstorm insurance is an insurance covering the damage that can be caused by wind events such as
hurricanes A tropical cyclone is a rapidly rotating storm system characterized by a low-pressure center, a closed low-level atmospheric circulation, strong winds, and a spiral arrangement of thunderstorms that produce heavy rain and squalls. Depend ...
.


Liability

Liability insurance is a broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured. *
Public liability Public liability is part of the law of tort which focuses on civil wrongs. An applicant (the injured party) usually sues the respondent (the owner or occupier) under common law based on negligence and/or damages. Claims are usually successful when ...
insurance or general liability insurance covers a business or organization against claims should its operations injure a member of the public or damage their property in some way. *
Directors and officers liability insurance Directors and officers liability insurance (also written directors' and officers' liability insurance; often called D&O) is liability insurance payable to the directors and officers of a company, or to the organization itself, as indemnification (re ...
(D&O) protects an organization (usually a corporation) from costs associated with litigation resulting from errors made by directors and officers for which they are liable. * Environmental liability or environmental impairment insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants. *
Errors and omissions insurance Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advice-, consulting, and ser ...
(E&O) is business liability insurance for professionals such as insurance agents, real estate agents and brokers, architects, third-party administrators (TPAs) and other business professionals. * Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a
basketball Basketball is a team sport in which two teams, most commonly of five players each, opposing one another on a rectangular Basketball court, court, compete with the primary objective of #Shooting, shooting a basketball (ball), basketball (appr ...
game, or a
hole-in-one In golf, a hole in one or hole-in-one (also known as an ace, mostly in American English) occurs when a ball hit from a tee to start a hole finishes in the cup. A ball hit from a tee following a lost ball, out-of-bounds, or water hazard is not a h ...
at a
golf Golf is a club-and-ball sport in which players use various clubs to hit balls into a series of holes on a course in as few strokes as possible. Golf, unlike most ball games, cannot and does not use a standardized playing area, and coping wi ...
tournament. *
Professional liability insurance Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advice-, consulting, and ser ...
, also called
professional indemnity insurance Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advice-, consulting, and ser ...
(PI), protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called
medical malpractice Medical malpractice is a legal cause of action that occurs when a medical or health care professional, through a negligent act or omission, deviates from standards in their profession, thereby causing injury or death to a patient. The negligen ...
insurance. Often a commercial insured's liability insurance program consists of several layers. The first layer of insurance generally consists of primary insurance, which provides first dollar indemnity for judgments and settlements up to the limits of liability of the primary policy. Generally, primary insurance is subject to a deductible and obligates the insured to defend the insured against lawsuits, which is normally accomplished by assigning counsel to defend the insured. In many instances, a commercial insured may elect to self-insure. Above the primary insurance or self-insured retention, the insured may have one or more layers of excess insurance to provide coverage additional limits of indemnity protection. There are a variety of types of excess insurance, including "stand-alone" excess policies (policies that contain their own terms, conditions, and exclusions), "follow form" excess insurance (policies that follow the terms of the underlying policy except as specifically provided), and "umbrella" insurance policies (excess insurance that in some circumstances could provide coverage that is broader than the underlying insurance).


Credit

Credit insurance repays some or all of a
loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
when the borrower is insolvent. *
Mortgage insurance Mortgage insurance (also known as mortgage guarantee and home-loan insurance) is an insurance policy which compensates lenders or investors in mortgage-backed securities for losses due to the default of a mortgage loan. Mortgage insurance can be ...
insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name "credit insurance" more often is used to refer to policies that cover other kinds of debt. * Many credit cards offer payment protection plans which are a form of credit insurance. * Trade credit insurance is business insurance over the accounts receivable of the insured. The policy pays the policy holder for covered accounts receivable if the debtor defaults on payment. * Collateral protection insurance (CPI) insures property (primarily vehicles) held as collateral for loans made by lending institutions.


Cyber attack insurance

Cyber-insurance is a business lines insurance product intended to provide coverage to corporations from Internet-based
risks In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
, and more generally from risks relating to
information technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
infrastructure, information privacy, information governance liability, and activities related thereto.


Other types

* All-risk insurance is an insurance that covers a wide range of incidents and perils, except those noted in the policy. All-risk insurance is different from peril-specific insurance that cover losses from only those perils listed in the policy. In car insurance, all-risk policy includes also the damages caused by the own driver. * Bloodstock insurance covers individual
horse The horse (''Equus ferus caballus'') is a domesticated, one-toed, hoofed mammal. It belongs to the taxonomic family Equidae and is one of two extant subspecies of ''Equus ferus''. The horse has evolved over the past 45 to 55 million y ...
s or a number of horses under common ownership. Coverage is typically for mortality as a result of accident, illness or disease but may extend to include infertility, in-transit loss, veterinary fees, and prospective foal. *
Business interruption insurance Business interruption insurance (also known as business income insurance) is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business ...
covers the loss of income, and the expenses incurred, after a covered peril interrupts normal business operations. *
Defense Base Act The Defense Base Act (DBA) (ch. 357 of the 77th United States Congress, , enacted August 16, 1941, codified at ) is an extension of the federal workers' compensation program that covers longshoremen and harbor workers, the Longshore and Harbor Wo ...
(DBA) insurance provides coverage for civilian workers hired by the government to perform contracts outside the United States and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, foreign nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits. *
Expatriate insurance Expatriate insurance policies are designed to cover financial and other losses incurred by expatriates while living and working in a country other than one's own. Insurance should be arranged prior to relocating to a new country or destination. Po ...
provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits. *Hired-in Plant Insurance covers liability where, under a contract of hire, the customer is liable to pay for the cost of hired-in equipment and for any rental charges due to a plant hire firm, such as construction plant and machinery. *
Legal expenses insurance Legal protection insurance (LPI), also known as legal expenses insurance (LEI) or simply legal insurance, is a particular class of insurance which facilitates access to law and justice by providing legal advice and covering the legal costs of a di ...
covers policyholders for the potential costs of legal action against an institution or an individual. When something happens which triggers the need for legal action, it is known as "the event". There are two main types of legal expenses insurance: before the event insurance and
after the event insurance Legal protection insurance (LPI), also known as legal expenses insurance (LEI) or simply legal insurance, is a particular class of insurance which facilitates access to law and justice by providing legal advice and covering the legal costs of a di ...
. * Livestock insurance is a specialist policy provided to, for example, commercial or hobby farms, aquariums, fish farms or any other animal holding. Cover is available for mortality or economic slaughter as a result of accident, illness or disease but can extend to include destruction by government order. * Media liability insurance is designed to cover professionals that engage in film and television production and print, against risks such as
defamation Defamation is the act of communicating to a third party false statements about a person, place or thing that results in damage to its reputation. It can be spoken (slander) or written (libel). It constitutes a tort or a crime. The legal defini ...
. * Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. (See the
nuclear exclusion clause The nuclear exclusion clause is a clause which excludes damage caused by nuclear and radiation accidents from regular insurance policies of, for example, home owners. : Example: ''Notwithstanding anything to the contrary herein, it is hereby und ...
and, for the United States, the Price–Anderson Nuclear Industries Indemnity Act.) * Over-redemption insurance is purchased by businesses to protect themselves financially in the event that a promotion ends up becoming more successful than was originally anticipated and/or budgeted for. *
Pet insurance Pet insurance is a form of insurance that pays, partly or in total, for veterinary treatment of the insured person's ill or injured pet. Some policies will pay out when the pet dies, or if the pet is lost or stolen. As veterinary medicine is in ...
insures pets against accidents and illnesses; some companies cover routine/wellness care and burial, as well. * Pollution insurance usually takes the form of first-party coverage for contamination of insured property either by external or on-site sources. Coverage is also afforded for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded. * Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection,
warranties In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract",Hogg M. (2011). ''Promises and Contract Law: Comparative Perspectives''p. 48 Cambri ...
,
guarantee Guarantee is a legal term more comprehensive and of higher import than either warranty or "security". It most commonly designates a private transaction by means of which one person, to obtain some trust, confidence or credit for another, engages ...
s, care plans and even mobile phone insurance. Such insurance is normally limited in the scope of problems that are covered by the policy. * Tax insurance is increasingly being used in corporate transactions to protect taxpayers in the event that a tax position it has taken is challenged by the IRS or a state, local, or foreign taxing authority *
Title insurance Title insurance is a form of indemnity insurance predominantly found in the United States and Canada which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. Unlike ...
provides a guarantee that title to
real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...
is vested in the purchaser or
mortgagee A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. ''Hypothec'' is the corresponding term in civil law jurisdicti ...
, free and clear of
lien A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...
s or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more general ...
transaction. *
Travel insurance Travel insurance is an insurance product for covering unforeseen losses incurred while travelling, either internationally or domestically. Basic policies generally only cover emergency medical expenses while overseas, while comprehensive policies ...
is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, and personal liabilities. *
Tuition insurance Tuition insurance is an insurance protecting students attending cost-intensive educational institutions - schools, colleges or universities - from the financial loss that may result from the student’s involuntary withdrawal from his or her studie ...
insures students against involuntary withdrawal from cost-intensive educational institutions *
Interest rate insurance Interest rate insurance protects the holder of a variable rate mortgage or loan from rising interest rates. It is generally offered independently of the original borrowing and typically as an alternative to a remortgage onto a fixed rate. As the i ...
protects the holder from adverse changes in interest rates, for instance for those with a variable rate loan or mortgage * Divorce insurance is a form of contractual liability insurance that pays the insured a cash benefit if their marriage ends in divorce.


Insurance financing vehicles

* Fraternal insurance is provided on a cooperative basis by fraternal benefit societies or other social organizations. *
No-fault insurance In its broadest sense, no-fault insurance is any type of insurance contract under which the insured party is indemnified by their own insurance company for losses, regardless of the source of the cause of loss. In this sense, it is no different ...
is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident. * Protected self-insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information. * Retrospectively rated insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use. * Formal
self-insurance Self-insurance is a situation in which a person or business that is liable for some risk does not take out any third-party insurance, but rather chooses to bear the risk itself. In the United States the concept applies especially to self-funded he ...
(active risk retention) is the deliberate decision to pay for otherwise insurable losses out of one's own money. This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self-insurance is usually used to pay for high-frequency, low-severity losses. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords. *
Reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
is a type of insurance purchased by insurance companies or self-insured employers to protect against unexpected losses.
Financial reinsurance Financial Reinsurance (or fin re), is a form of reinsurance which is focused more on capital management than on risk transfer. In the non-life segment of the insurance industry this class of transactions is often referred to as finite reinsurance. ...
is a form of reinsurance that is primarily used for capital management rather than to transfer insurance risk. *
Social insurance Social insurance is a form of Social protection, social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of Welfare, soci ...
can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that requires participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if they need to. Along the way, this inevitably becomes related to other concepts such as the justice system and the
welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others): **
National Insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...
**
Social safety net The social safety net (SSN) consists of non-contributory assistance existing to improve lives of vulnerable families and individuals experiencing poverty and destitution. Examples of SSNs are previously-contributory social pensions, in-kind and fo ...
**
Social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
**
Social Security debate (United States) This article concerns proposals to change the Social Security system in the United States. Social Security is a social insurance program officially called "Old-age, Survivors, and Disability Insurance" (OASDI), in reference to its three componen ...
**
Social Security (United States) In the United States, Social Security is the commonly used term for the federal Old-Age, Survivors, and Disability Insurance (OASDI) program and is administered by the Social Security Administration (SSA). The original Social Security Act ...
**
Social welfare provision Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
* Stop-loss insurance provides protection against catastrophic or unpredictable losses. It is purchased by organizations who do not want to assume 100% of the liability for losses arising from the plans. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits called deductibles.


Closed community and governmental self-insurance

Some communities prefer to create virtual insurance among themselves by other means than contractual risk transfer, which assigns explicit numerical values to risk. A number of
religious Religion is usually defined as a social system, social-cultural system of designated religious behaviour, behaviors and practices, morality, morals, beliefs, worldviews, religious text, texts, sacred site, sanctified places, prophecy, prophecie ...
groups, including the
Amish The Amish (; pdc, Amisch; german: link=no, Amische), formally the Old Order Amish, are a group of traditionalist Anabaptist Christian church fellowships with Swiss German and Alsatian origins. They are closely related to Mennonite churches ...
and some
Muslim Muslims ( ar, المسلمون, , ) are people who adhere to Islam, a monotheistic religion belonging to the Abrahamic tradition. They consider the Quran, the foundational religious text of Islam, to be the verbatim word of the God of Abrah ...
groups, depend on support provided by their
communities A community is a Level of analysis, social unit (a group of living things) with commonality such as place (geography), place, Norm (social), norms, religion, values, Convention (norm), customs, or Identity (social science), identity. Communiti ...
when
disaster A disaster is a serious problem occurring over a short or long period of time that causes widespread human, material, economic or environmental loss which exceeds the ability of the affected community or society to cope using its own resources ...
s strike. The risk presented by any given person is assumed collectively by the community who all bear the cost of rebuilding lost property and supporting people whose needs are suddenly greater after a loss of some kind. In supportive communities where others can be trusted to follow community leaders, this tacit form of insurance can work. In this manner the community can even out the extreme differences in insurability that exist among its members. Some further justification is also provided by invoking the
moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk ...
of explicit insurance contracts. In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
,
The Crown The Crown is the state in all its aspects within the jurisprudence of the Commonwealth realms and their subdivisions (such as the Crown Dependencies, overseas territories, provinces, or states). Legally ill-defined, the term has different ...
(which, for practical purposes, meant the
civil service The civil service is a collective term for a sector of government composed mainly of career civil servants hired on professional merit rather than appointed or elected, whose institutional tenure typically survives transitions of political leaders ...
) did not insure property such as government buildings. If a government building was damaged, the cost of repair would be met from public funds because, in the long run, this was cheaper than paying insurance premiums. Since many UK government buildings have been sold to property companies and rented back, this arrangement is now less common. In the United States, the most prevalent form of
self-insurance Self-insurance is a situation in which a person or business that is liable for some risk does not take out any third-party insurance, but rather chooses to bear the risk itself. In the United States the concept applies especially to self-funded he ...
is governmental risk management pools. They are self-funded cooperatives, operating as carriers of coverage for the majority of governmental entities today, such as county governments, municipalities, and school districts. Rather than these entities independently self-insure and risk bankruptcy from a large judgment or catastrophic loss, such governmental entities form a
risk pool A “Risk pool” is a form of risk management that is mostly practiced by insurance companies, which come together to form a pool to provide protection to insurance companies against catastrophic risks such as floods or earthquakes. The term is als ...
. Such pools begin their operations by capitalization through member deposits or bond issuance. Coverage (such as general liability, auto liability, professional liability, workers compensation, and property) is offered by the pool to its members, similar to coverage offered by insurance companies. However, self-insured pools offer members lower rates (due to not needing insurance brokers), increased benefits (such as loss prevention services) and subject matter expertise. Of approximately 91,000 distinct governmental entities operating in the United States, 75,000 are members of self-insured pools in various lines of coverage, forming approximately 500 pools. Although a relatively small corner of the insurance market, the annual contributions (self-insured premiums) to such pools have been estimated up to 17 billion dollars annually.


Insurance companies

Insurance companies may provide any combination of insurance types, but are often classified into three groups: *
Life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death ...
companies, that provide life insurance, annuities and pensions products and bear similarities to
asset management Asset management is a systematic approach to the governance and realization of value from the things that a group or entity is responsible for, over their whole life cycles. It may apply both to tangible assets (physical objects such as buildings ...
businesses * Non-life or
property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...
/
casualty insurance Casualty insurance is a defined term which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Casualty insurance is mainly liability coverage of an individual or organization for ne ...
companies, which provides other types of insurance. *
Health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...
companies, which sometimes provide life insurance or
employee benefits Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, or perks) include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. Inst ...
as well General insurance companies can be further divided into these sub categories. * Standard lines * Excess lines In most countries, life and non-life insurers are subject to different regulatory regimes and different
tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
and
accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...
rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is long-term in nature – coverage for life assurance or a pension can cover risks over many
decade A decade () is a period of ten years. Decades may describe any ten-year period, such as those of a person's life, or refer to specific groupings of calendar years. Usage Any period of ten years is a "decade". For example, the statement that "du ...
s. By contrast, non-life insurance cover usually covers a shorter period, such as one year.


Mutual versus proprietary

Insurance companies are commonly classified as either mutual or proprietary companies. Mutual companies are owned by the policyholders, while shareholders (who may or may not own policies) own proprietary insurance companies.
Demutualization Demutualization is the process by which a customer-owned mutual organization (''mutual'') or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization. As part of the demutualization process, member ...
of mutual insurers to form stock companies, as well as the formation of a hybrid known as a mutual holding company, became common in some countries, such as the United States, in the late 20th century. However, not all states permit mutual holding companies.


Reinsurance companies

Reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
companies are insurance companies that provide policies to other insurance companies, allowing them to reduce their risks and protect themselves from substantial losses. The reinsurance market is dominated by a few large companies with huge reserves. A reinsurer may also be a direct writer of insurance risks as well.


Captive insurance companies

Captive insurance Captive insurance is an alternative to self-insurance in which a parent group or groups create a licensed insurance company to provide coverage for itself. The main purpose of doing so is to avoid using traditional commercial insurance companies, ...
companies can be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity, which is a 100% subsidiary of the self-insured parent company; of a "mutual" captive, which insures the collective risks of members of an industr); and of an "association" captive, which self-insures individual risks of the members of a professional, commercial or industrial association. Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices. The types of risk that a captive can underwrite for their parents include property damage, public and product liability, professional indemnity, employee benefits, employers' liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance. Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background: * Heavy and increasing premium costs in almost every line of coverage * Difficulties in insuring certain types of fortuitous risk * Differential coverage standards in various parts of the world * Rating structures which reflect market trends rather than individual loss experience * Insufficient credit for deductibles or loss control efforts


Other forms

Other possible forms for an insurance company include reciprocals, in which policyholders reciprocate in sharing risks, and Lloyd's organizations.


Admitted versus non-admitted

Admitted insurance companies are those in the United States that have been admitted or licensed by the state licensing agency. The insurance they provide is called admitted insurance. Non-admitted companies have not been approved by the state licensing agency, but are allowed to provide insurance under special circumstances when they meet an insurance need that admitted companies cannot or will not meet.


Insurance consultants

There are also companies known as "insurance consultants". Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy among many companies. Similar to an insurance consultant, an "insurance broker" also shops around for the best insurance policy among many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client. Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.


Financial stability and rating

The financial stability and strength of an insurance company is a consideration when buying an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future. For that reason, a more financially stable insurance carrier reduces the risk of the insurance company becoming insolvent, leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool or other arrangements with less attractive payouts for losses). A number of independent rating agencies provide information and rate the financial viability of insurance companies. Insurance companies are rated by various agencies such as
AM Best AM Best is an American credit rating agency headquartered in Oldwick, New Jersey, that focuses on the insurance industry. Both the U.S. Securities and Exchange Commission and the National Association of Insurance Commissioners have designat ...
. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products.


Across the world

Advanced economies account for the bulk of the global insurance industry. According to
Swiss Re Swiss Reinsurance Company Ltd,
Swiss Re. Retrieved on 18 January 2011. "Swiss Reinsurance Company Ltd ("Swiss Re") ...
, the global insurance market wrote $6.287 trillion in direct premiums in 2020. ("Direct premiums" means premiums written directly by insurers before accounting for ceding of risk to reinsurers.) As usual, the United States was the country with the largest insurance market with $2.530 trillion (40.3%) of direct premiums written, with the People's Republic of China coming in second at only $574 billion (9.3%), Japan coming in third at $438 billion (7.1%), and the United Kingdom coming in fourth at $380 billion (6.2%). However, the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
's single market is the actual second largest market, with 18 percent market share.


Regulatory differences

In the United States, insurance is regulated by the states under the McCarran-Ferguson Act, with "periodic proposals for federal intervention", and a nonprofit coalition of state insurance agencies called the
National Association of Insurance Commissioners The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territor ...
works to harmonize the country's different laws and regulations. The National Conference of Insurance Legislators (NCOIL) also works to harmonize the different state laws. In the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994, created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU (subject to permission from authority in the head office) and allowed insurance consumers to purchase insurance from any insurer in the EU. As far as
insurance in the United Kingdom Insurance in the United Kingdom, particularly long-term insurance, is divided into different categories. The categorisation is currently set out in sections 333B, and 431B to 431F of the Income and Corporation Taxes Act 1988 (ICTA) with each cate ...
, the
Financial Services Authority The Financial Services Authority (FSA) was a quasi-judicial body accountable for the financial regulation, regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investmen ...
took over insurance regulation from the General Insurance Standards Council in 2005; laws passed include the Insurance Companies Act 1973 and another in 1982, and reforms to
warranty In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract",Hogg M. (2011). ''Promises and Contract Law: Comparative Perspectives''p. 48 Cambrid ...
and other aspects under discussion . The
insurance industry in China The Chinese insurance industry has experienced rapid expansion over the past decade. In addition to steadily increasing demand, two major supply-side trends have encouraged the development of the industry: (1) under the World Trade Organization ...
was nationalized in 1949 and thereafter offered by only a single state-owned company, the
People's Insurance Company of China The People's Insurance Company (Group) of China Limited, known as PICC Group or just PICC, is a Chinese listed insurer. The Chinese Central Government is the controlling shareholder. The group contains the major subsidiaries: PICC Asset Managem ...
, which was eventually suspended as demand declined in a communist environment. In 1978, market reforms led to an increase in the market and by 1995 a comprehensive Insurance Law of the People's Republic of China was passed, followed in 1998 by the formation of
China Insurance Regulatory Commission The China Insurance Regulatory Commission (CIRC) was an agency of China authorized by the State Council to regulate the Chinese insurance products and services market and maintain legal and stable operations of insurance industry. It was founded o ...
(CIRC), which has broad regulatory authority over the insurance market of China. In India IRDA is insurance regulatory authority. As per the section 4 of IRDA Act 1999, Insurance Regulatory and Development Authority (IRDA), which was constituted by an act of parliament. National Insurance Academy, Pune is apex insurance capacity builder institute promoted with support from Ministry of Finance and by LIC, Life & General Insurance companies. In 2017, within the framework of the joint project of the
Bank of Russia The Central Bank of the Russian Federation (CBR; ), doing business as the Bank of Russia (russian: Банк России}), is the central bank of the Russian Federation. The bank was established on July 13, 1990. The predecessor of the bank can ...
and
Yandex Yandex LLC (russian: link=no, Яндекс, p=ˈjandəks) is a Russian multinational technology company providing Internet-related products and services, including an Internet search engine, information services, e-commerce, transportation, map ...
, a special
check mark A check or check mark (American English), checkmark (Philippine English), tickmark (Indian English) or tick ( Australian, New Zealand English, and British English) is a mark (✓, ✔, etc.) used, primarily in the English-speaking world, to in ...
(a green circle with a tick and 'Реестр ЦБ РФ' (Unified state register of insurance entities) text box) appeared in the search for Yandex system, informing the consumer that the company's financial services are offered on the marked website, which has the status of an insurance company, a broker or a mutual insurance association.


Controversies


Does not reduce the risk

Insurance is just a risk transfer mechanism wherein the financial burden which may arise due to some fortuitous event is transferred to a bigger entity (i.e., an insurance company) by way of paying premiums. This only reduces the financial burden and not the actual chances of happening of an event. Insurance is a risk for both the insurance company and the insured. The insurance company understands the risk involved and will perform a
risk assessment Broadly speaking, a risk assessment is the combined effort of: # identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. hazard analysis); and # making judgments "on the ...
when writing the policy. As a result, the premiums may go up if they determine that the policyholder will file a claim. However, premiums might reduce if the policyholder commits to a risk management program as recommended by the insurer. It's therefore important that insurers view risk management as a joint initiative between policyholder and insurer since a robust risk management plan minimizes the possibility of a large claim for the insurer while stabilizing or reducing premiums for the policyholder. If a person is financially stable and plans for life's unexpected events, they may be able to go without insurance. However, they must have enough to cover a total and complete loss of employment and of their possessions. Some states will accept a surety bond, a government bond, or even making a cash deposit with the state.


Moral hazard

An insurance company may inadvertently find that its insureds may not be as risk-averse as they might otherwise be (since, by definition, the insured has transferred the risk to the insurer), a concept known as
moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk ...
. This 'insulates' many from the true costs of living with risk, negating measures that can mitigate or adapt to risk and leading some to describe insurance schemes as potentially
maladaptive In evolution, a maladaptation () is a trait that is (or has become) more harmful than helpful, in contrast with an adaptation, which is more helpful than harmful. All organisms, from bacteria to humans, display maladaptive and adaptive traits. I ...
.


Complexity of insurance policy contracts

Insurance policies can be complex and some policyholders may not understand all the fees and coverages included in a policy. As a result, people may buy policies on unfavorable terms. In response to these issues, many countries have enacted detailed statutory and regulatory regimes governing every aspect of the insurance business, including minimum standards for policies and the ways in which they may be
advertised Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
and sold. For example, most insurance policies in the English language today have been carefully drafted in
plain English Plain English (or layman's terms) are groups of words that are to be clear and easy to know. It usually avoids the use of rare words and uncommon euphemisms to explain the subject. Plain English wording is intended to be suitable for almost anyone, ...
; the industry learned the hard way that many courts will not enforce policies against insureds when the judges themselves cannot understand what the policies are saying. Typically, courts construe ambiguities in insurance policies against the insurance company and in favor of coverage under the policy. Many institutional insurance purchasers buy insurance through an insurance broker. While on the surface it appears the broker represents the buyer (not the insurance company), and typically counsels the buyer on appropriate coverage and policy limitations, in the vast majority of cases a broker's compensation comes in the form of a commission as a percentage of the insurance premium, creating a conflict of interest in that the broker's financial interest is tilted toward encouraging an insured to purchase more insurance than might be necessary at a higher price. A broker generally holds contracts with many insurers, thereby allowing the broker to "shop" the
market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...
for the best rates and coverage possible. Insurance may also be purchased through an agent. A tied agent, working exclusively with one insurer, represents the insurance company from whom the policyholder buys (while a free agent sells policies of various insurance companies). Just as there is a potential conflict of interest with a broker, an agent has a different type of conflict. Because agents work directly for the insurance company, if there is a claim the agent may advise the client to the benefit of the insurance company. Agents generally cannot offer as broad a range of selection compared to an insurance broker. An independent insurance consultant advises insureds on a fee-for-service retainer, similar to an attorney, and thus offers completely independent advice, free of the financial conflict of interest of brokers or agents. However, such a consultant must still work through brokers or agents in order to secure coverage for their clients.


Limited consumer benefits

In the United States, economists and consumer advocates generally consider insurance to be worthwhile for low-probability, catastrophic losses, but not for high-probability, small losses. Because of this, consumers are advised to select high
deductible In an insurance policy, the deductible (in British English, the excess) is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses. In general usage, the term ''deductible'' may be used to describe o ...
s and to not insure losses which would not cause a disruption in their life. However, consumers have shown a tendency to prefer low deductibles and to prefer to insure relatively high-probability, small losses over low-probability, perhaps due to not understanding or ignoring the low-probability risk. This is associated with reduced purchasing of insurance against low-probability losses, and may result in increased inefficiencies from
moral hazard In economics, a moral hazard is a situation where an economic actor has an incentive to increase its exposure to risk because it does not bear the full costs of that risk. For example, when a corporation is insured, it may take on higher risk ...
.Schindler, R. M. (1994)
Consumer Motivation for Purchasing Low-Deductible Insurance
In ''Marketing and Public Policy Conference Proceedings'', Vol. 4, D. J. Ringold (ed.), Chicago, IL: American Marketing Association, 147–155.


Redlining

Redlining is the practice of denying insurance coverage in specific geographic areas, supposedly because of a high likelihood of loss, while the alleged motivation is unlawful discrimination.
Racial profiling Racial profiling or ethnic profiling is the act of suspecting, targeting or discriminating against a person on the basis of their ethnicity, religion or nationality, rather than on individual suspicion or available evidence. Racial profiling involv ...
or redlining has a long history in the property insurance industry in the United States. From a review of industry underwriting and marketing materials, court documents, and research by government agencies, industry and community groups, and academics, it is clear that race has long affected and continues to affect the policies and practices of the insurance industry. In July 2007, the US
Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction ov ...
(FTC) released a report presenting the results of a study concerning credit-based insurance scores in automobile insurance. The study found that these scores are effective predictors of risk. It also showed that African-Americans and Hispanics are substantially overrepresented in the lowest credit scores, and substantially underrepresented in the highest, while Caucasians and Asians are more evenly spread across the scores. The credit scores were also found to predict risk within each of the ethnic groups, leading the FTC to conclude that the scoring models are not solely proxies for redlining. The FTC indicated little data was available to evaluate benefit of insurance scores to consumers.Credit-Based Insurance Scores: Impacts on Consumers of Automobile Insurance
Federal Trade Commission (July 2007)
The report was disputed by representatives of the
Consumer Federation of America The Consumer Federation of America (CFA) is a non-profit organization founded in 1968 to advance consumer interests through research, education and advocacy. According to CFA's website, its members are nearly 300 consumer-oriented non-profits, w ...
, the National Fair Housing Alliance, the
National Consumer Law Center The National Consumer Law Center (NCLC) is an American nonprofit organization headquartered in Boston, Massachusetts, specializing in consumer issues on behalf of low-income people. Legal services, government and private attorneys, as well as co ...
, and the Center for Economic Justice, for relying on data provided by the insurance industry. All states have provisions in their rate regulation laws or in their fair trade practice acts that prohibit unfair discrimination, often called redlining, in setting rates and making insurance available. In determining premiums and premium rate structures, insurers consider quantifiable factors, including location,
credit score A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report, information typically sourced from credit bu ...
s,
gender Gender is the range of characteristics pertaining to femininity and masculinity and differentiating between them. Depending on the context, this may include sex-based social structures (i.e. gender roles) and gender identity. Most cultures u ...
,
occupation Occupation commonly refers to: *Occupation (human activity), or job, one's role in society, often a regular activity performed for payment *Occupation (protest), political demonstration by holding public or symbolic spaces *Military occupation, th ...
,
marital status Civil status, or marital status, are the distinct options that describe a person's relationship with a significant other. ''Married'', '' single'', ''divorced'', and ''widowed'' are examples of civil status. ''Civil status'' and ''marital stat ...
, and
education Education is a purposeful activity directed at achieving certain aims, such as transmitting knowledge or fostering skills and character traits. These aims may include the development of understanding, rationality, kindness, and honesty. Va ...
level. However, the use of such factors is often considered to be unfair or unlawfully
discriminatory Discrimination is the act of making unjustified distinctions between people based on the groups, classes, or other categories to which they belong or are perceived to belong. People may be discriminated on the basis of race, gender, age, rel ...
, and the reaction against this practice has in some instances led to political disputes about the ways in which insurers determine premiums and regulatory intervention to limit the factors used. An insurance underwriter's job is to evaluate a given risk as to the likelihood that a loss will occur. Any factor that causes a greater likelihood of loss should theoretically be charged a higher rate. This basic principle of insurance must be followed if insurance companies are to remain solvent. Thus, "discrimination" against (i.e., negative differential treatment of) potential insureds in the risk evaluation and premium-setting process is a necessary by-product of the fundamentals of insurance underwriting. For instance, insurers charge older people significantly higher premiums than they charge younger people for term life insurance. Older people are thus treated differently from younger people (i.e., a distinction is made, discrimination occurs). The rationale for the differential treatment goes to the heart of the risk a life insurer takes: older people are likely to die sooner than young people, so the risk of loss (the insured's death) is greater in any given period of time and therefore the
risk premium A risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. It is used widely in finance and economics, the general definition being the expected risky return less t ...
must be higher to cover the greater risk. However, treating insureds differently when there is no actuarially sound reason for doing so is unlawful discrimination.


Insurance patents

New assurance products can now be protected from copying with a
business method patent Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking and tax compliance etc. Business method patents are a relatively new species of paten ...
in the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
. A recent example of a new insurance product that is patented is Usage Based
auto insurance Vehicle insurance (also known as car insurance, motor insurance, or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or bodily injur ...
. Early versions were independently invented and patented by a major US auto insurance company,
Progressive Auto Insurance The Progressive Corporation is an American insurance company, the third largest insurance carrier and the No. 1 commercial auto insurer in the United States. The company was co-founded in 1937 by Jack Green and Joseph M. Lewis, and is headquar ...
() and a Spanish independent inventor, Salvador Minguijon Perez. Many independent inventors are in favor of patenting new insurance products since it gives them protection from big companies when they bring their new insurance products to market. Independent inventors account for 70% of the new U.S. patent applications in this area. Many insurance executives are opposed to patenting insurance products because it creates a new risk for them.
The Hartford The Hartford Financial Services Group, Inc., usually known as The Hartford, is a United States-based investment and insurance company. The Hartford is a Fortune 500 company headquartered in its namesake city of Hartford, Connecticut. It was ranke ...
insurance company, for example, recently had to pay $80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a type of corporate owned life insurance product invented and patented by Bancorp. There are currently about 150 new patent applications on insurance inventions filed per year in the United States. The rate at which patents have been issued has steadily risen from 15 in 2002 to 44 in 2006. The first insurance patent to be granted was including another example of an application posted was. It was posted on 6 March 2009. This patent application describes a method for increasing the ease of changing insurance companies.


Insurance on demand

Insurance on demand (also IoD) is an insurance service that provides clients with insurance protection when they need, i.e. only episodic rather than on 24/7 basis as typically provided by traditional insurers (e.g. clients can purchase an insurance for one single flight rather than a longer-lasting travel insurance plan).


Insurance industry and rent-seeking

Certain insurance products and practices have been described as
rent-seeking Rent-seeking is the act of growing one's existing wealth without creating new wealth by manipulating the social or political environment. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effi ...
by critics. That is, some insurance products or practices are useful primarily because of legal benefits, such as reducing taxes, as opposed to providing protection against risks of adverse events.


Religious concerns

Muslim scholars have varying opinions about life insurance. Life insurance policies that earn interest (or guaranteed bonus/NAV) are generally considered to be a form of ''
riba The Royal Institute of British Architects (RIBA) is a professional body for architects primarily in the United Kingdom, but also internationally, founded for the advancement of architecture under its royal charter granted in 1837, three supp ...
'' (
usury Usury () is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is ch ...
) and some consider even policies that do not earn interest to be a form of ''gharar'' (
speculation In finance, speculation is the purchase of an asset (a commodity, good (economics), goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline i ...
). Some argue that ''gharar'' is not present due to the actuarial science behind the underwriting. Jewish rabbinical scholars also have expressed reservations regarding insurance as an avoidance of God's will but most find it acceptable in moderation. Some Christians believe insurance represents a lack of faith and there is a long history of resistance to commercial insurance in
Anabaptist Anabaptism (from New Latin language, Neo-Latin , from the Greek language, Greek : 're-' and 'baptism', german: Täufer, earlier also )Since the middle of the 20th century, the German-speaking world no longer uses the term (translation: "Re- ...
communities (
Mennonites Mennonites are groups of Anabaptist Christian church communities of denominations. The name is derived from the founder of the movement, Menno Simons (1496–1561) of Friesland. Through his writings about Reformed Christianity during the Radic ...
,
Amish The Amish (; pdc, Amisch; german: link=no, Amische), formally the Old Order Amish, are a group of traditionalist Anabaptist Christian church fellowships with Swiss German and Alsatian origins. They are closely related to Mennonite churches ...
,
Hutterites Hutterites (german: link=no, Hutterer), also called Hutterian Brethren (German: ), are a communal ethnoreligious group, ethnoreligious branch of Anabaptism, Anabaptists, who, like the Amish and Mennonites, trace their roots to the Radical Refor ...
,
Brethren in Christ The Brethren in Christ Church (BIC) is a River Brethren Christian denomination with roots in the Mennonite church, Radical Pietism, and Wesleyan holiness. They have also been known as River Brethren and River Mennonites. The Canadian denominat ...
) but many participate in community-based self-insurance programs that spread risk within their communities.


See also

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Agent of record An agent of record (AOR) is an individual or a legal entity with a duly executed contractual agreement with an insurance policy owner, in line with the prevailing legal norms and regulations of the region in which the contract was entered. The agen ...
* DIRTI 5 * Earthquake loss *
Financial adviser A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...
*
Financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
(broader industry to which insurance belongs) * Geneva Association (the International Association for the Study of Insurance Economics) *
Global assets under management Global assets under management consists of assets held by asset management firms, pension funds, sovereign wealth funds, hedge funds A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensiv ...
*
Insurance broker An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation. An insurance broker is distinct from an insurance agent in that a broker typically acts on behalf of a client by negotia ...
*
Insurance fraud Insurance fraud is any act committed to defraud an insurance process. It occurs when a claimant attempts to obtain some benefit or advantage they are not entitled to, or when an insurer knowingly denies some benefit that is due. According to the ...
*
Insurance Hall of Fame The Insurance Hall of Fame, occasionally referred to as the International Insurance Hall of Fame, honors exceptional members of the insurance field. It was created in 1957 and is administered by the global nonprofit International Insurance Society ( ...
*
Insurance law Insurance law is the practice of law surrounding insurance, including insurance policies and claims. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especial ...
*
Insurance Premium Tax (UK) Insurance Premium Tax (IPT) is a type of indirect tax levied on general insurance premiums in the United Kingdom. Overview The UK government introduced the Insurance Premium Tax to raise revenue from the insurance sector, which was viewed as b ...
*
List of Acts of Parliament of the United Kingdom Parliament, 1960-1979 {{British legislation lists This is an ''incomplete'' list of Acts of the Parliament of the United Kingdom from its establishment in 1801 up until the present. Lists of Acts by Year * List of Acts of the Parliament of the United Kingdom, 1801 ...
*
Loss-control consultant A loss control consultant (also LCC or loss control representative) is someone who possess a demonstrable knowledge and / or education in arts and science of safety engineering and risk management. A typical loss control consultant will possess a ...
*
Reinsurance Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
*
Intergovernmental Risk Pool A “Risk pool” is a form of risk management that is mostly practiced by insurance companies, which come together to form a pool to provide protection to insurance companies against catastrophic risks such as floods or earthquakes. The term is als ...
* '' The Invisible Bankers: Everything the Insurance Industry Never Wanted You to Know'' (book) *
List of finance topics The following outline is provided as an overview of and topical guide to finance: Finance – addresses the ways in which individuals and organizations raise and allocate monetary resources over time, taking into account the risks entailed ...
* List of insurance topics *
List of United States insurance companies This is a list of insurance companies based in the United States. These are companies with a strong national or regional presence having insurance as their primary business. In 1752, Benjamin Franklin founded the first American insurance company a ...
*
Social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...
* ''
Uberrima fides ''Uberrima fides'' (sometimes seen in its genitive form ''uberrimae fidei'') is a Latin phrase meaning "utmost good faith" (literally, "most abundant faith"). It is the name of a legal doctrine which governs insurance contracts. This means that a ...
'' *
Universal health care Universal health care (also called universal health coverage, universal coverage, or universal care) is a health care system in which all residents of a particular country or region are assured access to health care. It is generally organized ar ...
*
Welfare state A welfare state is a form of government in which the state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitabl ...
Country-specific articles: :*
Insurance in Australia Australia's insurance market can be divided into roughly three components: life insurance, general insurance and health insurance. These markets are fairly distinct, with most larger insurers focusing on only one type, although in recent times ...
:*
Insurance in India Insurance in India covers both the public and private sector organisations. It is listed in the Constitution of India in the Seventh Schedule as a Union List subject, meaning it can only be legislated by the Central Government only. The insuran ...
:*
Insurance in the United States Insurance in the United States refers to the market for risk in the United States, the world's largest insurance market by premium volume. According to Swiss Re, of the $6.287 trillion of global direct premiums written worldwide in 2020, $2.530 ...
:*
Insurance in the United Kingdom Insurance in the United Kingdom, particularly long-term insurance, is divided into different categories. The categorisation is currently set out in sections 333B, and 431B to 431F of the Income and Corporation Taxes Act 1988 (ICTA) with each cate ...
:*
Insurance industry in China The Chinese insurance industry has experienced rapid expansion over the past decade. In addition to steadily increasing demand, two major supply-side trends have encouraged the development of the industry: (1) under the World Trade Organization ...


Notes


References


Citations


Sources

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Further reading

Insurance Law and Regulation: Cases and Materials by Kenneth S. Abraham. New York, N.Y : Foundation Press, 2005.


External links


Congressional Research Service (CRS) Reports regarding the US Insurance industry

Federation of European Risk Management Associations
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Insurance Bureau of Canada

Insurance Information Institute

National Association of Insurance Commissioners


– finding information on the insurance industry (UK focus) {{Authority control Financial services Services sector of the economy Articles containing video clips