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Understanding Insurance Risk Transfer

Insurance is an agreement where one party agrees to take on the financial risk of potential losses for another party in exchange for regular payments. It allows for the equitable distribution of risk across many individuals or entities to help cover unexpected costs that could be difficult for any single party to bear alone. The party that agrees to take on the risk is the insurance company, and the other party is the policyholder who pays premiums for a guarantee that losses will be covered.

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Dennise Talan
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128 views1 page

Understanding Insurance Risk Transfer

Insurance is an agreement where one party agrees to take on the financial risk of potential losses for another party in exchange for regular payments. It allows for the equitable distribution of risk across many individuals or entities to help cover unexpected costs that could be difficult for any single party to bear alone. The party that agrees to take on the risk is the insurance company, and the other party is the policyholder who pays premiums for a guarantee that losses will be covered.

Uploaded by

Dennise Talan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange

for money.

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