Question
Give four benefits of the 'pooling of risks' to an insurance company.
Answer
- Creates a common pool of funds from premiums
- Enables insurance company to meet operating costs
- Surplus funds can be re-invested
- Able to spread risks
- Enables the insurance company to compensate / indemnify those who suffer loss
- It earns the company profits / incomes
- Enables insurance company to meet operating costs
- Surplus funds can be re-invested
- Able to spread risks
- Enables the insurance company to compensate / indemnify those who suffer loss
- It earns the company profits / incomes
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