The UK Insurance Market

Abstract

This article looks at insurance companies in the UK. The insurance industry is an important contributor to the economy, a major employer and a significant source of overseas earnings. Insurance industry helps businesses to protect themselves from risk and provides a wide range of services to people. But what is the mean of the term insurance? Insurance is a service and a promise to pay if the insured event occurs. This means that the purpose of insurance is to help to manage the negative effects of risk on our personal and working lives. Insurance is a highly effective risk-transfer mechanism because it allows for the effects of the risk to be passed from the insured to the insurer. In return for accepting this risk, the insurer charges a premium that reflects the level of risk it is accepting from the insured. Insurance is an intangible product. There is no physical evidence of the purchase beyond a policy document. An insurance company or insurer or underwriter is the business, which takes on the risks in the insurance policy. In contrast, an intermediary sells or advises on insurance policies. Examples of intermediaries are: insurance brokers, insurance consultants, independent financial advisers, accounts and solicitors, banks and building societies, travel agents, and estate agents.