MANAGEMENT

Detailed explanation-1: -Spreads Risk: Insurance facilitates moving of risk of loss from the insured to the insurer. The basic principle of insurance is to spread risk among a large number of people. A large population gets insurance policies and pay premium to the insurer.

Detailed explanation-2: -Reinsurance occurs when multiple insurance companies share risk by purchasing insurance policies from other insurers to limit their own total loss in case of disaster. By spreading risk, an insurance company takes on clients whose coverage would be too great of a burden for the single insurance company to handle alone.

Detailed explanation-3: -: the extent to which an insurance company by selecting diversified and independent risks that are fairly uniform in size and sufficiently large in number can predict the losses thereon with reasonable accuracy by the law of averages.

Detailed explanation-4: -Risk spread is a business strategy employed by insurance companies. It involves selling insurance covering the same risk in one period or selling a huge number of policies with different coverage in many areas.