What is risk pooling?
Insurance is a way to capitalize your risks to survive for any planned financial loss. In terms of insurance, risk pooling is shared equally financially in a common human financial risk. So, the capital market or here, the insurance company, takes that risk from you in exchange for a regular payment called premium.
The company believes that premium risk cover is sufficient. An interesting point to note here is that you are not the only insured. There are many people who try for the same type of insurance cover. This group of people is called an insurance pool. The potential for all clients needing an insurance claim is almost unlikely. Thus, if and when such an event (claim) occurs for a certain number of persons, the risk pill allows the insurance company to settle their claim.
Risk Pooling History
The insurance industry basically runs the concept of risk pooling. The earliest references to insurance policies and risk pooling can be found approximately 5000 years ago. Traders and traders collect their wealth and share the common risk of product loss or damage. That has covered traders from sudden loss or loss of product by paying a small amount to recover.
Insurance is a way to capitalize your risks to survive for any planned financial loss. In terms of insurance, risk pooling is shared equally financially in a common human financial risk. So, the capital market or here, the insurance company, takes that risk from you in exchange for a regular payment called premium.
Risk Pooling History
The insurance industry basically runs the concept of risk pooling. The earliest references to insurance policies and risk pooling can be found approximately 5000 years ago. Traders and traders collect their wealth and share the common risk of product loss or damage. That has covered traders from sudden loss or loss of product by paying a small amount to recover.