Question

III. Discussions 1. What is the importance for the insurance firms to write “ideally insurable” loss exposures? If the applicant's loss exposure is not "ideally insurable", what can the insurance firms do to insure it?

Answer 1

There are characteristic of ideally insurable loss exposure that are pure risk fortuitous losses pooja units and affordable. Three components required for an insurance to consider a loss exposure to be definite in the context of ideally insurable loss exposure are time causes and location the insurance must be able to determine the event that led to the loss occured and where the loss are occurring. It is large number of similar exposure units that allow an insurance to explain the risk of loss over pool of similar insurance and managing the premium level.

The exposes of laws involving small losses and loss exposes involving with high profitability of laws are generally considered an insurable as they do not care about economically feasible to ensure the expenses of providing the insurance probably surplus is the amount of losses that is by potential.

The insurance firms can do a lot of things to the applicant's loss exposure of it is ideally insurable:

1. It should enables individuals and organisations to manage cash flow uncertainty so that it can be improved and benefits the applicant

2. Promote control office and freed upinstalled financial resources for others expenditures or can be investment.

3. It should provide source of investment funds for insurers.

4. The social border should be reduced and it should indemnifies individual and organisations businesses for covered losses.

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