Insurance company

The insurance company involves in providing insurance service. It is the company, which involves to reduce the risk of financial losses due to unexpected events. It involves in compensating the financial losses to the individuals as well as corporations in consideration of the payment of premium. It is a highly popular financial institution. It has been established in both private and government sectors.
An insured pays certain amount of money as premium, which is the source of fund for the insurance company. The amount of premium collected is used to compensate the losses. It collects a large amount of premium, which can be invested in productive sectors. Insurance companies are financial institutions as they mobilize the savings and grant loans. The main objectives of insurance company are to compensate the insured for the loss suffered and to mobilize the ideal capital in the productive sectors for the development of the country. It should be accepted that the insurance companies have great contribution in the economic development of the country.
        Functions of insurance:- Insurance business has become an integral part of the business. It is essential for the expansion and development of trade  and industry. It supports for the economic development of the country. The primary function of insurance is to provide financial security against the losses due to uncertain events. In addition, it performs various other functions as well. The functions of insurance can be divided into primary and secondary as follows:
Primary functions: -   1) Provides certainty: Risk arises due to uncertainty. It can not be predicted before it occurs. Insurance provides certainty against uncertainties which result losses of the property and life. Insurance company promises to compensate the losses of insured property caused by risk and uncertainties.
2) Provides protection: Another primary function of insurance is to provide protection. People and their properties are surrounded by risk and may suffer from losses due to uncertainties. Insurance provides protection against such risks and uncertainties. It is the only means, which does not stop the happening of uncertain events but promises to pay a specific sum in case of loss. Thus, insurance provides protection taking the burden of financial compensation for the loss that may take place at any   time.
3) Distributes risk: Insurance can be defined as the co-operative device of distributing risk among the persons who are

  exposed to it. Risk is distributed among insured at the time of insurance contract in the consideration of insurance     premium.