INSURANCE 101 AN OVERVIEW: Basic Knowledge About Insurance

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 INSURANCE 101 AN OVERVIEW



Introduction

In the past present and future humanity has been, is, and will be faced with risks that may hamper our normal lifestyles and the running of our businesses. The concept of insurance started as far back as the 18th Century when Ship merchants decided to minimize their losses during their voyage at sea by contributing to a pool and compensate any of them that is faced with an eventuality during his/her voyage at sea. Today the concept has metamorphosed and been applied to a variety of products and services, divided into two main broad categories; Life and Non-Life (General) Insurances.


What is Insurance?

Insurance is a risk transfer mechanism. It is the concept of the contribution of many (premium) paying for the losses of a few. The premium varies from one policyholder depending on the risk exposure, The malta Training Centre, (2017). There are many advantages why we should or must insure ourselves and propensity against unforeseen eventualities, We will be looking at that in our subsequent writeups.


Do I, do You need Insurance?

Oh YES, we all need insurance coverage to protect ourselves and our properties in the occurrence of a loss that is accidental. Since the future is uncertain to have some assurance about tomorrow insurance is the only solution. Insurers will put you back or your business to the position it was before the happening of a loss through what is known as compensation. Remember with insurance you can not benefit from insurance compensation, for example, you insured your life, property, or business to the sum of one million if you suffer a loss your insurer will compensate you to the limit of that amount, not more.


Insurance A FRAUD?

BIG NO, Insurance business activities are regulated internally and internationally to make sure it works in the interest of the insured (the person who buys the insurance policy) Remember no government will accept the running of a financial service that is aimed at exploiting its citizens. For example, the regulatory body for Cameroon and French-speaking African countries is Conference InterAfricaine des Marches D’assurances (CIMA), Ghana; National Insurance Commission (NIC), Kenya; Insurance Regulatory Authority (IRA), The UK; Prudential Regulatory Authority (PRA) part of the Bank of England just to name a few.


Insurtech the new Normal and the way forward

Many of us have been hearing of Financial inclusion in recent years. What is it and what are its goals. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs transactions, payments, savings, credit, and insurance delivered in a responsible and sustainable way, The World Bank (2018).


Financial inclusion can only be effective with the proper implementation of digital recognition. Insurtech refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. Using new streams of data from Internet-enabled devices to dynamically price premiums according to observed behavior, Marshall, (2020). Financial inclusion through micro-insurance is going to benefit low-income earners through the provision of affordable insurance policies in an ethical manner. We that already happening in our societies as citizens can purchase affordable insurance covers and pay using their mobile wallets.


Recommendation

It is our moral duty to protect ourselves, properties, and businesses from unforeseen circumstances by buying insurance covers, YES we should.


Conclusion

Now we all know what is insurance is all about briefly, who needs insurance cover, also, certain the insurance business is not a scam but rather a scheme to protect us, and know Insurtech is the way forward let’s stay away from the mythological concepts of insurance and buy all the policies recommended to protect our lives, property, and businesses.


Keep an open eye on our next Write-up!


Newton Bezeng

Founder BeNew Insurance

Email: newtonbezeng@outlook.com

Website: https://benew.business.site

Blog: benewinsurance.blogspot.com

Facebook: https://web.facebook.com/Benewinsurance

LinkedIn: https://www.linkedin.com/company/benew-insurance

Twitter: @newtonbezeng


References

-Malta International Training Centre, (2017). Insurance principle and Legal Aspects. Module 1 -The World Bank (2018). Financial inclusion. https://www.worldbank.org/en/topic/financialinclusion/overview -Marshall, H. (2020). Insurtech. Investopedia https://www.investopedia.com/terms/i/insurtech.asp



Location: Accra, Ghana

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