Insurance industry

The Insurance IndustryThe insurance industry deals with indemnifying individuals against loss incurred. For the loss incurred to be indemnified, one needs to have an insurable interest and he/she must have paid their premiums. The insurance industry is divided into various segments including insurance agent, brokers and carriers. Insurance carriers are the principal organizations that undertake to indemnify the insured against losses incurred. Insurance agents and brokers place business with the insurance companies. The agents and brokers are independent entities. There are also other professionals involved in the insurance business, for example the loss adjustors. Insurance carriers develop the policy statements. They define the necessary conditions that are required before one gets insured. After signing the policy document the insured is required to pay premiums. The premiums form a pool which the insurance company invests in other sectors of the economy, such as real estate and bonds. In case the insured loss occurs the carrier might sell off part of the investments in order to indemnify the insured. Two different kinds of carriers exist; primary insurance carriers and the secondary carriers. The primary insurance carriers offer insurance services to individuals. Secondary insurance carriers offer insurance services to the insurance companies. It is a mandatory requirement that insurance companies cede a certain percentage of their business to reinsurance companies. Primary insurance carriers offer insurance products such as life insurance, disability insurance, property insurance as well as liability insurance cover. Homeowners’ policies as well as automotive insurance cover both property and liability. Group insurance is another insurance product offered by carriers. The group insurance product is offered to employers for their employees. Group insurance cover may also be offered to trade unions.