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Evolution of Insurance - Risk Management and Insurance, Principles of Insurance Video Lecture | Principles of Insurance - B Com

49 videos|51 docs|14 tests

FAQs on Evolution of Insurance - Risk Management and Insurance, Principles of Insurance Video Lecture - Principles of Insurance - B Com

1. What is the concept of risk management in insurance?
Ans. Risk management in insurance refers to the process of identifying, assessing, and prioritizing potential risks that an individual or organization may face. It involves implementing strategies to minimize or eliminate these risks and transferring them to an insurance company through insurance policies.
2. How does insurance help in managing risks?
Ans. Insurance helps in managing risks by providing financial protection against potential losses. When individuals or organizations purchase insurance policies, they transfer the risk of potential losses to the insurance company. In case of an unfortunate event, the insurance company compensates the policyholder for the covered losses, reducing the financial impact on the insured.
3. What are the key principles of insurance?
Ans. The key principles of insurance include: 1. Principle of Utmost Good Faith: Both the insurance company and the insured must disclose all relevant information honestly and accurately. 2. Principle of Insurable Interest: The insured must have a financial interest in the subject matter of the insurance policy. 3. Principle of Indemnity: The insured should be compensated for the actual financial loss suffered, up to the policy limit. 4. Principle of Subrogation: After paying a claim, the insurance company has the right to recover the amount from any responsible third party. 5. Principle of Contribution: If the insured has multiple insurance policies covering the same risk, each insurer will contribute proportionately to the claim settlement.
4. How has insurance evolved over time?
Ans. Insurance has evolved significantly over time. Initially, insurance was limited to marine and cargo risks. Over the years, various types of insurance policies have been introduced, including life insurance, health insurance, property insurance, liability insurance, and more. The advent of technology has also revolutionized the insurance industry, making it more accessible and efficient through online platforms and digital solutions.
5. What is the role of insurance in the modern economy?
Ans. Insurance plays a crucial role in the modern economy by providing stability and financial protection. It encourages individuals and businesses to take risks and venture into new opportunities, knowing that potential losses can be mitigated through insurance coverage. Insurance also contributes to economic growth by providing funds for investment and ensuring the smooth functioning of various industries. Additionally, insurance helps in spreading risks among a large number of policyholders, preventing the concentration of financial losses on a few individuals or organizations.
49 videos|51 docs|14 tests
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