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Basics_Part1
By Mudit Pande
Agenda
Peculiarities of insurance
Types of Risk
What is Insurance?
Insurance Market Place
Parties to an Insurance Contract
Insurance Principles
Insurance processes
Types of Insurance
Insurance & Technology
Peculiarities of Insurance
Product can be tested only after certain period & that to happening
of contingency Loss in Future
What is Risk?
Risk
It is a condition arising out of uncertainty
leading to a possibility of adverse deviation
from desired outcome
Types of Risk
Speculative Risk
Which entails a chance of gain as well as a chance of loss
e.g. Gambling.
Pure Risk
The only consideration is the possibility of loss or no loss, but not making a
profit e.g. Fire, Flood, Accident etc.
Dynamic Risk
A risk that arises from the continuous change that exists in the business or
economic environment or in technology. Dynamic risk can produce a gain (or
savings) as well as a loss (or expenses).
Static Risk
A risk that arises from the normal course of business activities and does not
involve changes in the environment or technology. Static risk can only result in
a loss.
Insurable Risk
Pure and static risk can only be insured
Physical
Physical conditions E.g. Highly inflammable
substance storage hazard
Moral
Dishonesty of character E.g. Non-disclosure of
of highly inflammable substance
Peril
storage
Risk Management
Definition
It is the scientific approach to deal with the pure risks faced
by individuals and business.
Risk management is the process of identifying, measuring or
assessing risk and then developing strategies to manage the
risk. In general, the strategies employed include transfer &
sharing the risk with another party, avoiding the risk, reducing
the negative affect of the risk, and accepting some or all of
the consequences of a particular risk.