Significance

From an economic point of view, insurance is a financial arrangement for sharing accidental losses; from a legal point of view, insurance is a contractual act, in which one party agrees to compensate the other party A contractual arrangement for losses; from a social perspective, insurance is an important part of the social and economic security system and an "exquisite stabilizer" of social production and social life; from a risk management perspective, insurance is a method of risk management .

Function

1. Insurance must have risks. The purpose of establishing an insurance system is to deal with the occurrence of specific dangerous accidents. If there is no risk, there is no insurance. In order to apply the principle of large numbers, risks that are likely to benefit are not within the scope of insurability, so commercial insurance institutions generally do not insure such risks.

2. Insurance must provide financial compensation for losses caused by dangerous accidents. The so-called economic compensation means that this kind of compensation is not the restoration of the destroyed original objects, nor is it compensation in kind, but monetary compensation.

Therefore, the loss caused by the accident must be economically calculable. In personal insurance, the value of the person itself cannot be calculated, but human labor can create value. Death and disability of a person will lead to the loss of labor force, thereby reducing the income of the individual or his family and increasing expenses, so personal insurance It is to use economic compensation or benefits to make up for this increased economic burden, but it does not guarantee that people can recover their lost labor force or lives.

3. Insurance must have a mutual financial relationship. The insurance system adopts the method of spreading the losses to many units to reduce the losses of disaster-stricken units. Through insurance, policyholders jointly pay insurance premiums, establish an insurance compensation fund, and jointly obtain protection.

4. The insurance contribution must be reasonable. The compensation fund of insurance is shared by the people participating in the insurance. In order to make everyone's burden fair and reasonable, the sharing fund must be calculated scientifically. Extended information

Origin

Human society has been faced with natural disasters and accidents since the beginning. In the process of fighting against nature, ancient people developed methods to deal with disasters and accidents. Insurance ideas and original forms of insurance methods.

Around 2500 BC, the king of the ancient Babylonian Kingdom ordered monks, judges, village chiefs, etc. to collect taxes as funds for fire relief. Stonemasons in ancient Egypt established a funeral mutual aid organization to pay membership fees to pay for burials. The soldier organization in the ancient Roman Empire provided living expenses for the survivors of fallen soldiers in the form of fund-raising, and gradually formed an insurance system.

With the development of trade, around 1792 BC, during the era of Hammurabi, the sixth king of Babylon, business prospered. In order to aid commerce and protect the caravans, mules, horses and goods were lost. Compensation, in the Code of Hammurabi, stipulates the terms of shared compensation for losses.

Reference: Baidu Encyclopedia "Insurance"