All Your Really Need To Know About Insurance Companies
The Insured
That's you and me and the lady next door. It's also the gigantic oil company with oil rigs out in the oceans of the world. We are the one's who want financial protection. Anybody who is "named" on an insurance policy is the "insured".
The Insurer
That's the company who is taking our risk in exchange for us paying them a premium. They have to figure out how risky the proposal is and charge an insurance premium that both makes them a profit and entices us to take up the offer. If they get it right then the insurance policy works a bit like an investment for them because they make a profit at the end of it. Along with making a profit on the premium they also earn a living by investing some of the premium into other investments such as stocks and shares, and government treasuries. Money makes money as they say.
Well known of insurance companies include AIG in America and Aviva in Europe. Big insurance companies will often operate through smaller companies. These are the brand names we see on television commericals. An example of this is the GEICO brand owned by Berkshire Hathaway Inc. which is itself owned by that very nice billionaire Mr Warren Buffet. In the UK, Norwich Union was a separate brand name owned by the European giant Aviva.
Re-Insurers
These are companies or individuals or think it's a good investment to buy a portion of the risk from other insurer's. The insurer's may be happy to sell some of the risk on their books if they feel they are getting a good sale price or are over exposed to a particular type of risk.
Insurance Agents or Insurance Brokers
These are the cheerful boys and girls we meet when we walk into a local insurance office. We give them the details about the car or home we want to insure and they stare at their computer screens for an eternity trying to find the insurance quote we think we will buy. They get a commission on any sale they make. They also have to keep a pot of money aside for those insurance policies that are canceled for which they have to pay back the commission to the insurance company. As you are well aware there are now lots of online and telephone based insurance agents all trying to attract our business. Insurance agents have to be fully trained and qualified in order to act in this capacity.
Introducers
These are companies, and individuals, who find customers for insurance agents. They make contact with the likes of you and me and then pass on our contact details onto the insurance agent. In return they get paid for each customer lead they supply.
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