Insurance coverage is, by definition, a system that protects a person, an affiliation or an organization towards the monetary and financial penalties related to the prevalence of a specific threat (random occasion).
The means carried out by insurance coverage organizations to guard them towards this threat is to affiliate them with a neighborhood of individuals (the insured), who contribute to have the ability to compensate these amongst its members who are suffering materials injury or injury. bodily damage within the occasion of the danger. Thus, insofar as it’s the whole neighborhood of policyholders that materially covers the injury suffered by its members affected by the prevalence of the danger, insurance coverage is a threat administration system primarily based on the idea of solidarity.
Insurance coverage gamers
In France, there are three forms of insurance coverage organizations, ruled by three distinct codes of legislation:
Insurance coverage corporations, which fall underneath the Insurance coverage Code
Mutuals (teams) ruled by the Mutual Code
Provident establishments, whose actions are regulated by the Social Safety Code
The world of insurance coverage just isn’t restricted to insurers alone, however entails many different gamers.
The sector of insurance coverage covers particularly all of the trades carried out in corporations whose actions are ruled by the Insurance coverage Code, particularly:
Jobs carried out inside public restricted corporations (SA)
Jobs carried out inside mutual insurance coverage corporations (SAM)
Professions carried out inside mutual insurance coverage corporations (SMA)
Middleman professions akin to normal insurance coverage brokers and brokers
The professions of insurance coverage auxiliaries represented by insurance coverage consultants
The several types of insurance coverage
European neighborhood directives distinguish between two forms of insurance coverage:
“Non-life” insurance coverage (property insurance coverage, legal responsibility insurance coverage and medical health insurance)
“Life” insurance coverage (life, dying, financial savings, retirement, and many others.)
This distinction between these two forms of insurance coverage is predicated on the distinction in the way in which premiums are managed. Typically, non-life insurance coverage manages premiums by distribution (collective administration technique the place the premiums of the neighborhood of policyholders are used to pay claims for the neighborhood of policyholders for a similar monetary yr), whereas insurance coverage life manages them by capitalization (particular person administration technique through which the insured’s premiums are used to ship a service to him on the time of the prevalence of the danger).
Alongside this distinction between non-life insurance coverage and life insurance coverage, there may be one other distinction between:
P&C insurance coverage (Hearth, Accident, Miscellaneous Dangers): they embody property insurance coverage and legal responsibility insurance coverage
private insurance coverage: these embody medical health insurance and life insurance coverage.
Typically talking, insurance coverage corporations are considered as institutional traders; in truth, they’ve at their disposal an unlimited mass of cash made up of the premiums of the insured; they have to due to this fact handle these sums on behalf of the insured and typically for a reasonably very long time. Insurance coverage corporations due to this fact have an unlimited capability to finance the nationwide financial system, via the investments they have to make particularly within the context of the funds deficit.