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    Summary of Mitra Case

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    Aayush Agrawal
    Insurance provides protection from financial loss and is a form of risk management. It involves an insurer selling policies to insureds. For a risk to be insurable, it must have seven characteristics - it must affect a large number of exposure units, have defined and measurable losses, involve accidental losses, involve large individual losses, have affordable premiums, allow for calculable losses, and pose limited risk of disastrously large losses. Common types of insurance include home, health, and car insurance. To receive payouts, policyholders must file an insurance claim with their local agent, who investigates and works with the insurer to determine payment.

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    Summary of Mitra Case

    Uploaded by

    Aayush Agrawal
    44 views2 pages
    Insurance provides protection from financial loss and is a form of risk management. It involves an insurer selling policies to insureds. For a risk to be insurable, it must have seven characteristics - it must affect a large number of exposure units, have defined and measurable losses, involve accidental losses, involve large individual losses, have affordable premiums, allow for calculable losses, and pose limited risk of disastrously large losses. Common types of insurance include home, health, and car insurance. To receive payouts, policyholders must file an insurance claim with their local agent, who investigates and works with the insurer to determine payment.

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    SUMMARY OF MITRA CASE

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    Insurance provides protection from financial loss and is a form of risk management. It involves an insurer selling policies to insureds. For a risk to be insurable, it must have seven characteristics - it must affect a large number of exposure units, have defined and measurable losses, involve accidental losses, involve large individual losses, have affordable premiums, allow for calculable losses, and pose limited risk of disastrously large losses. Common types of insurance include home, health, and car insurance. To receive payouts, policyholders must file an insurance claim with their local agent, who investigates and works with the insurer to determine payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    44 views2 pages

    Summary of Mitra Case

    Uploaded by

    Aayush Agrawal
    Insurance provides protection from financial loss and is a form of risk management. It involves an insurer selling policies to insureds. For a risk to be insurable, it must have seven characteristics - it must affect a large number of exposure units, have defined and measurable losses, involve accidental losses, involve large individual losses, have affordable premiums, allow for calculable losses, and pose limited risk of disastrously large losses. Common types of insurance include home, health, and car insurance. To receive payouts, policyholders must file an insurance claim with their local agent, who investigates and works with the insurer to determine payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    SUMMARY

     Insurance is a means of protection from financial loss. It is a form of risk


    management, primarily used to hedge against the risk of a contingent or uncertain
    loss.

     The company sells insurance which sells the insurance is called the insurer and the
    person or unit buying the insurance is called insured.

     Insurable risk consists of seven common characteristics

    i. Large Numbers of Exposure Units: When a large no. of standardize units


    are present and are increasing, it helps the insurers benefit because the
    actual results are more likely to become close to excepted claims.

    ii. Define loss: This means the loss should be definite as to cause, time, place,
    and amount. A second requirement is that the loss should be both
    determinable and measurable. This means the loss should be definite as to
    cause, time, place, and amount.

    iii. Accident loss: Accidental loss should be considered as a pure loss and not
    as an unexpected loss. The same is in case of ordinary business risk.

    iv. Large loss: The size of the loss is significant and the premium needs to
    cover the expected cost of loss, the cost of issuing and administering the
    policy, adjusting losses and supplying the capital needed to practically
    assure that the insurer will be able to pay claims.

    v. Affordable premium: The premium should be affordable in the sense that


    it should not cause significant loss to the insurer.

    vi. Calculable loss: The insurer must be able to calculate both the average
    frequency and the average severity of future losses with some accuracy.

    vii. Limited Risk of Disastrously large loss: In case of natural calamities like
    earthquakes, hurricanes, floods, etc. people will be suffering with a large
    amount of losses on their head which eventually will have to be borne by
    the insurer. Thus, it will cause a reduction in issuing the policies.
     There are different types of insurance like home insurance, health insurance, causality
    insurance, property insurance etc.

     The actual application for benefits provided by an insurance company is called


    insurance claim.

     All the policy holders must file an insurance claim before any money can be paid out.

     In general insurance claim is filled with the local agent of the insurance company who
    is responsible for studying the details and negotiating the payments from the required
    insurer.

     Once the insurance claim is filed with the local agent the insurance company sends an
    investigator called appraiser.

     Appraiser evaluates the claim and determine whether the claim is reasonable or it’s a
    fraud and if its reasonable then payments are made.

    Conditional Probability

     Conditional Probability is also known as Bayes Theorem. In Conditional Probability


    one outcome is already known and we have to find out the probability of other. One
    condition is attached, one outcome has already occurred. The two events are not
    independent.

    P(A/B) =P (A and B)/P(B)

    Where A is given, so the one given should be written in the denominator.

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