Insurance Contract and Indian Market




Insurance Contract and Indian Market 
Spread insurers’ Risks

Quality of business is important to all insurers for a number of reasons including profitability, regulatory
compliance, and, ultimately, financial survival. Insurance companies need to make sure the risks they cover
are insurable – and spread these risks appropriately – so they are not susceptible to catastrophic losses.
Intermediaries help insurers in the difficult task of spreading the risks in their portfolio. Intermediaries work
with multiple insurers, a variety of clients, and, in many cases, in a broad geographical spread. They help
carriers spread the risks in their portfolios according to industry, geography, volume, line of insurance and
other factors. This helps insurers from becoming over-exposed in a particular region or a particular type of
risk, thus freeing precious resources for use elsewhere.
Reducing Costs
By helping to reduce costs for insurers, broker services also reduce the insurance costs of all undertakings in
a country or economy. Because insurance is an essential expense for all businesses, a reduction in prices
can have a large impact on the general economy, improving the overall competitive position of the particular
market.
Of course, the insurance cycle of “hard” and “soft” markets can have a significant impact on the benefits –
both good and bad – of increased availability. Generally, however, increased availability benefits the
consumer by leading to product competition, price competition, and improved services. By reducing
insurance costs across markets, intermediaries make an important contribution to improving the economic
conditions in a country.

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