Insurance isa service that provides a benefit upon the occurrence of an event is uncertain and random, often called ” risk “. The benefit, usually financial, may be for an individual, an association or a company, in exchange for the collection of a contribution or premium.
By extension, the insurance is the economic sector which includes the activities of design, production and marketing of this type of service.
What is the purpose of the insurance ?
Life is not made only of good times, it also presents a risk.Thus, no one is immune to an accident or a serious illness. And also in the world of work, mistakes are inevitable: the loss of a cargo may occur for example during transport. Even if it is impossible to safeguard completely against such risks, to protect themselves against the financial damage they cause is quite feasible. This is the type of protection that is offered by the insurance companies.
The assurances are essential to the functioning of a modern market economy. Without them, many economic transactions, such as the transport of goods, would simply be unworkable, as the risk of a significant financial loss would be too high. Switzerland has a total of 200 private insurance companies, which employ more than 6,500 people (the state in 2016). The sector includes the following industries: life insurance, property insurance, accident insurance, sickness insurance and reinsurance.
How do the insurances function ?
The subscription of an insurance is accompaniedby the payment of an amount – the bonus – to theinsurance company. In the event of disaster, thelatter (the insurer) compensates the financialdamage while drawing from the boxed bonuses; in general, the sum paid with the injured part cannothowever exceed a certain ceiling agreed upon by contract.
In order to be able to propose thisservice, the insurer had to conclude as a preliminary a large number of contracts withindividuals and companies. As only a weak shareof the policy–holders will undergo indeed adisaster, the financial damage is distributedbetween many payers of bonuses. This principle,which consists in joining together the risks andassuming them jointly, is called the “collectiveassumption of responsibility of the risks.