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Unit 1: Evolution and Meaning of Insurance

Insurance Company: Any corporation is said to be an insurance company which is primarily Notes
engaged in the business of furnishing insurance protection to the public.
Insurance Policy: The printed form, which serves as the contract between an insurer and an
insured.
Insurance: It is contract (policy) in which an individual or entity receives financial protection or
reimbursement against losses from an insurance company.
Insured: Insured is a person or organization covered by an insurance policy.
Insurer: Insurer is the party who promises to pay losses or benefits to the insured under the
insurance contract.
Lloyd’s of London: It is an insurance marketplace situated in London.

1.9 Review Questions

1. Explain the evolution of insurance.

2. Define the term insurance.
3. What are the two common parties to risk and insurance? Give examples of each.
4. “Insurance is a risk coverage device”. Explain.
5. Why only a small percentage of policyholders suffer losses? Explain briefly.
6. Briefly explain which period is projected to be the ‘Golden Age’ for the Indian insurance
industry.
7. Discuss the history of Indian insurance.
8. What is the role of insurance in a financial system?

Answers: Self Assessment

1. Premium 2. Investment
3. Marine 4. Burial
5. Risks 6. Guideline
7. Death 8. Life

9. Insurer 10. Losses
11. Policyholder 12. Venture
13. Disclose 14. Economic
15. Financial

1.10 Further Readings

Books Gulati, Neelam. C. (2011), Banking and Insurance, Excel Books.
Gulati, Neelam. C. (2013), Principles of Risk Management and Insurance, Excel Books.
Krishnaswamy, G. (2009), Principles and Practice of Life Insurance, Excel Books.

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