MANAGEMENT

Detailed explanation-1: -Insurance does not reduce the risk of loss or damage that a company may suffer. But it provides a protection against such loss that a company may suffer.

Detailed explanation-2: -Solution: Insurance pays when there is loss of asset. Insurance is a method of sharing the losses of a ‘few’ by ‘many’. property to assess the risk for rating purposes.

Detailed explanation-3: -What is Risk? Definition of ‘risk’ in insurance is the “uncertainty of the occurrence of an event that can cause economic losses". What are the forms that risk? Other forms of risk among other pure risk, speculative risk, the particular risk and fundamental risk.

Detailed explanation-4: -In summary, an insurance contract covers a policyholder for economic loss caused by a peril named in the policy. The policyholder pays a known premium to have the insurer guarantee payment for the unknown loss. In this manner, the policyholder transfers the economic risk to the insurance company.

Detailed explanation-5: -Risk insurance refers to the risk or chance of occurrence of something harmful or unexpected that might include loss or damage of the valuable assets of the person or injury or death of the person where the insurers assess these risks and, based on which, work out the premium that the policyholder needs to pay.