InsuranceWorkers compensation Indemnify Reasonable expectations Agent (Life Advisor) Excess of loss reinsurance Punitive damages
Spread of risk
Insurance companies use a concept called diversification to minimize the risk of losses among their policyholders. This means selling insurance to a large number of people in different geographical areas and for different types of risks. For example, a company will be more willing to insure against perils that have a wide spread of risk, such as fire or theft, as opposed to perils with a narrow spread, like flood insurance. This is because flood insurance is more likely to be purchased by those who live near bodies of water, which increases the risk for the insurance company.
Related terms
Understand the meaning and definition of Workers compensation in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Indemnify in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Reasonable expectations in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Agent (Life Advisor) in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Excess of loss reinsurance in the context of stock market, trading, and investments.
MOREUnderstand the meaning and definition of Punitive damages in the context of stock market, trading, and investments.
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