MANAGEMENT

Detailed explanation-1: -Provide protection : The primary purpose of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happending of the risk, but can certainly provide for the losses of risk.

Detailed explanation-2: -Insurance is a key aspect in risk management processes due to its invaluable benefits like: Safeguarding from financial loss: Business can be impacted by several factors like theft, natural disaster, or accidents. Insurance can be a crucial aspect in avoiding financial losses due to such threats.

Detailed explanation-3: -The law of large numbers states that as the number of policyholders increases, the more confident the insurance company is its prediction will prove true. Therefore, they attempt to acquire a large number of similar policyholders who all contribute to a fund which will pay the losses.

Detailed explanation-4: -It involves selling insurance covering the same risk in one period or selling a huge number of policies with different coverage in many areas. Spreading out risk in this way allows insurers to avoid paying claims that threaten to ruin their financial health, as could happen if all of their risks were not diversified.