大学核心商务英语读写教程unitinsuranceandfinancialcooperation.pptxVIP

;Objectives;;The primary function of insurance is to act as risk transfer mechanism. Insurance will not, in itself, prevent any of risks from occurring but what it will do is provide some form of financial security. We know that there must be limits on the availability of this risk transfer mechanism. It is necessary to have some ideas of what can and cannot be insured. Rather than list the events themselves, we will note the characteristics or nature of insurable risks. There is one caveat which should be made at this point: it is not possible, or indeed wise, to be dogmatic about these classifications of insurable risk. The world of business is not a static environment. It changes to adjust to circumstances as they are perceived, and what may be an uninsurable risk to day could very well be insurable tomorrow.; Theme of the Text Text A mainly illustrates the characteristics of an insurable risk. Insurance involves pooling funds from many insured entities in order to pay for relatively uncommon but severely devastating losses which can occur to these entities. The insured entities are therefore protected from risk for a fee, with the fee being dependent upon the frequency and severity of the event occurring. In order to be insurable, the risk insured against must meet certain characteristics in order to be an insurable risk.;; In probability theory, the law of large numbers (LLN) is a theorem that describes the result of performing the same experiment a large number of times. According to the law, the average of the results obtained from a large number of trials should be close to the expected value, and will tend to become closer as more trials are performed.; The practice of insurers transferring portions of risk portfolios to other parties by some form of agreement in order to reduce the likelihood of having to pay a large obligation resulting from an insurance claim. The intent of reinsurance is for an insurance company to reduce the risks associated wi