The most important reason for the existence of insurance business is to?
Answer Details
The most important reason for the existence of insurance business is to spread losses to all covered participants. Insurance is a financial product that provides protection against the risk of loss due to unforeseen events such as accidents, illness, or natural disasters. The insurer collects premiums from a large pool of policyholders and uses that money to pay for any losses that may occur. By spreading the risk among many individuals, insurance helps to protect individuals and businesses from the potentially devastating financial consequences of a loss. Without insurance, a single loss could be financially catastrophic for an individual or business. While insurance may also provide for the replacement of facilities, encourage savings, and promote safety, the primary purpose of insurance is to spread risk and protect individuals and businesses from financial ruin.