For a long time, men have been looking for a way to insure their belongings so that they do not lose everything in the event of a problem. And while it has undergone significant changes since its inception in 1700 BC, in Babylonian society, the role of insurance has not really changed. Insurance always aims to protect, despite the different forms of contracts that currently exist.
What is an insurance?
Simply put, insurance is a mechanism that allows a person (physical or moral) to protect themselves from the financial and economic consequences of the occurrence of a risk. Under the insurance contract , the insurer undertakes to provide a benefit to the insured upon the occurrence of a risk. The insured person agrees to pay a premium or a contribution.
In France, there are 3 types of organizations offering insurance services. They are governed by separate legislation:
- Insurance companies that are governed by the Insurance Code;
- Mutuals that fall under the Code of mutuality;
- Provident institutions that fall under the Social Security Code.
It should be noted however that the insurance world is not limited to insurers alone, many other actors work there: general agents of insurance, experts of insurance, brokers …
Classification of insurance
It is possible to classify insurance by taking into account several criteria of distinction. The most common classification is based on the obligations of the insurer at the time of the performance of the contract. Thus, there is:
- Non-life insurance in which the insurer must compensate the victim for the effects of a claim and offer compensation proportional to the cost of the damage. Within these insurances, it is necessary to distinguish between the insurance of things (compensation for damages that may be suffered by the property of a third party and cover the damage suffered by the property of the insured) and liability insurance (repair damage to others);
- Insurance of persons in which the insurer pays an amount the amount of which is contractually established at the time of the occurrence of a risk affecting the life of the insured or the subscriber. Such insurance can be divided into two subcategories: the life insurance (life insurance, insurance in case of life, endowment) and non-life insurance (health insurance, personal injury insurance).
The advantage of the distinction between non-life insurance and life and health insurance is that non-life insurance is based on a compensatory principle, while life and health insurance is based on a lump sum principle (enrichment).
The roles of insurance
In addition to protecting people, insurance plays a relatively important role in the economy because it makes business relations more reliable, reassures investors in the national economy and encourages investment.
The role of insurance is also social since the amounts paid to insured persons and beneficiaries allow them to maintain their income, safeguard their assets, reduce social security services, keep their jobs and Finally, to boost the economic fabric.