23

Unit I The World Insurance Market

Warm-up:

1. How do you understand the idea of insurance?

2. What insurance companies do you know?

3. Why has insurance become an important part of the financial services market?

Section a

Vocabulary list:

1. risk management - управление рисками

2. to hedge against the risk – страховать, снижать риск

3. to appraise – оценивать

4. to indemnify – компенсировать, гарантировать возмещение убытков от порчи или потери

5. n. indemnification

6. exposure – страхуемый риск

7. accidental loss – потери при несчастных случаях

8. the law of large numbers – закон больших чисел

9. insurance coverage – страховое покрытие

10. premium – страховой взнос

11. calculable loss – рассчитанные потери

12. utmost good faith – наивысшая добросовестность (фундаментальный принцип страхового дела, предполагающий, что лицо, желающее оформить страховой полис,  должно предоставить всю необходимую страховщику для правильного расчета страховой премии за страхуемый риск информацию.)

13. subrogation – суброгация – переход прав страхователя к страховщику

14. proximate cause – непосредственная причина

15. to syndicate the risk – синдицировать, объединять

16. reinsurance – перестрахование

Notes:

1. occupational disease – профессиональная болезнь

2. injurious conditions – условия, влекущие причинение вреда, ущерба

3. an insured event – страховой случай

4. the loss recoverable as a result of the claim –

5. capital constraint – ограниченность капитала

Reading

I. Skimming

Skim through the text to find answers to the following questions:

1. How is insurance defined?

2. What are the parties participating in an insurance contract?

3. What is insurability? How can it be determed?

II. Skanning

Skan through the text to find answers to the following questions:

1. What are the sources from which insurers pay for the losses?

2. Can every risk be insured?

3. What are the major legal principles of insurance?

Insurance: concept

In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.

Insurance involves pooling funds from many insured entities (known as exposures) to pay for the losses that some may incur. 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. Insurance is a commercial enterprise and a major part of the financial services industry, but individual entities can also self-insure through saving money for possible future losses.