Homework of Second Presentation.docx - Review Question of Presentation Two 1 a What is the definition of insurance b From the definition identify four

Homework of Second Presentation.docx - Review Question of...

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Review Question of Presentation Two 1. a. What is the definition of insurance? b. From the definition, identify four basic characteristics of insurance? 1. a. Insurance is guaranteed to pay loses from the insurer to insured in particular conditions. So, insurer indemnify the losses that made by in particular accidentally situations to the insured. b. Pooling of losses: Sharing of losses by the entire group. Payment of fortuitous losses: Guaranteed to pay loses of the insured one from the insurer when terms happen in the arrangement. Risk Transfer: Transfer risk from the insured to insurer that has stronger financial position. İndemnification: The insurer restore to insured’s losses after the accident in particular condition. 2. Explain the law of large numbers. The law of large numbers is the mathematical principle of the insurance.If number of insured sample is low, it can be harmful for the insurer. If the number of insured sample is high, risk will be higher for insurer but insurer keeps it own profit with this way.
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  • Winter '16
  • Fred R. David

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