Definition Insurance

Definition

Insurance is, by definition, a system that protects an individual, an association or a company against the financial and economic consequences related to the occurrence of a particular risk (random event).

The means implemented by the insurance agencies to protect them against this risk is to associate them with a community of persons (insured persons), which contributes to be able to compensate those from among its members who would suffer property damage or corporal in case of risk realization. Thus, insofar as the whole community of insured persons who materially takes care of the damage suffered by its members struck by the realization of the risk, the insurance is a risk management system based on the notion of solidarity.
Insurance players

In France, there are three types of insurance organizations, governed by three distinct codes of law:

    Insurance companies, which fall under the insurance code
    Mutuals (groupings) governed by the Code of Mutuality
    Provident institutions, whose activities are regulated by the Social Security Code

The world of insurance is not limited to insurers alone, but engages many other actors.

The field of insurance covers, in particular, all the trades that are exercised in the companies whose activities are governed by the insurance code, namely:

    The trades exercised in the public limited companies (SA)
    Trades performed in mutual insurance companies (SAM)
    Trades in Mutual Insurance Companies (SMA)
    Intermediary trades such as general insurance agents and brokers
    Insurance auxiliary trades represented by insurance experts

The different types of insurance

European Community directives distinguish two types of insurance:

    "Non-life" insurance (property assurances, liability insurance and health insurance)
    Insurance "Life" (life, death, savings, retirement ...)

This distinction between these two types of insurance is based on the difference in premium management mode. Indeed, in general, non-life insurance manage the premiums by distribution (collective management mode where the premiums of the insured community are used to pay the disasters of the Community of insured under the same fiscal year), while the insurance. Insurance life manage them by capitalization (individual management mode where the premiums of the insured are used to deliver a service at the time of the occurrence of risk).

Beside this distinction non-life insurance and life insurance, there is another distinction between:

    IARD insurance (fire, accidents, miscellaneous risks): they include property assurances and liability insurance

    The insurance of people: they bring together health insurance and life insurance.

From a general point of view, insurance companies are considered as institutional investors; Indeed, they have at their disposal a huge mass of silver consisting of the premiums of the insured; They must therefore handle these sums on behalf of the insured and sometimes for a long time. Insurance companies therefore have a huge capacity for the funding of the national economy, by the investments they need to do mainly in the context of the budget deficit.