Insurance function refers to the functions and effects that the insurance system can play, which directly determines the necessity of the existence and development of the insurance system, and also determines the position and role of the insurance industry in a country's financial dependence system and even the social and economic system. The function of insurance can be divided into basic function and derivative function.
(1) basic functions
The basic function embodies the insurance mechanism, sharing the losses caused by disasters and accidents by collecting premiums to achieve the purpose of economic compensation, which is divided into two functions: loss sharing and economic compensation.
① Loss allocation function: Insurance is a method to allocate losses, which is based on the unity of opposites of contingency and inevitability of disasters and accidents. The insurance mechanism can operate because the insured is willing to pay a small amount of insurance premium in exchange for compensation for large uncertain losses. Insurance organizations collect insurance premiums from a large number of policyholders to share the huge losses that a few of them have unfortunately suffered.
② Economic compensation function: Insurance realizes its purpose of economic compensation by sharing losses, and makes economic compensation to the units and individuals who suffer from disasters and accidents according to the insurance contract. The emergence and development of insurance is to meet the needs of compensation for disaster losses.
(2) The derivative functions of derivative functional insurance are investment and financing functions and disaster prevention and loss prevention functions.
① Investment and financing function: On the one hand, for the insurer, there is a certain time difference between the collection of insurance premium and the payment or compensation of insurance premium, at this time, the insurer can invest and operate the insurance funds to preserve and increase the value of insurance funds; On the other hand, for the insured, the insured can choose certain insurance products to get the expected payment of insurance money, thus taking insurance as an investment.
② Function of disaster prevention and loss prevention: Generally speaking, the insurer can realize the function of disaster prevention and loss prevention by providing loss management services, that is, helping the insured to predict, analyze and evaluate potential loss risks and put forward reasonable prevention schemes and loss management measures. First, the insurance function.
Security function is the foundation of insurance industry, which can best reflect the characteristics and core competitiveness of insurance industry. The guarantee function of insurance is embodied in the compensation function of property insurance and the payment function of life insurance.
(1) Property insurance compensation
Insurance is to compensate according to the scope of responsibility and insurance amount agreed in the insurance contract and the actual loss amount when a specific disaster accident occurs within the validity period of insurance. Through compensation, the actual loss of existing social wealth caused by disasters and accidents is compensated in value, and the use value is restored, so that the process of social reproduction can continue.
This kind of compensation of insurance includes not only the compensation for economic losses caused by natural disasters or accidents, but also the economic compensation for the economic compensation liability of the insured to the third party according to law, and also the compensation for economic losses caused by breach of contract in commercial credit.
(2) Payment of personal insurance
Life insurance and property insurance are completely different. It is difficult to evaluate a person's life with money, so the insured amount of life insurance is determined by the insured in consultation with the insurer according to the insured's needs for life insurance and the insured's ability to pay, within the scope and conditions permitted by law. Therefore, when the insurance accident agreed in the insurance contract occurs or the agreed age reaches or the agreed period expires, the insurer pays the insurance money as agreed.
Second, the function of financing.
The function of financial intermediary refers to the financial intermediary role played by insurance funds in reinvesting idle parts in the process of social reproduction. In order to make the insurance business stable, the insurer must ensure the preservation and appreciation of insurance funds, which also requires the insurer to use insurance funds. The use of insurance funds is not only necessary but also possible.
On the one hand, there is a time lag between premium income and compensation expenditure, which makes it possible for insurance companies to raise insurance funds; On the other hand, insurance accidents do not all happen at the same time, so it is impossible to compensate all the insurance premiums charged by the insurer at one time, that is, there is sometimes a lag between the insurance premiums charged by the insurer and the compensation fees. Electricity provides insurance companies with the possibility of raising insurance funds.
However, the financing of insurance funds should be based on the compensation or payment of insurance, and at the same time, we should adhere to the principles of legality, liquidity, safety and efficiency.
With the further expansion of the channels for the use of insurance funds in China, the financial intermediary function has a greater and greater impact on China's financial market. At the end of 2008, the balance of insurance funds in China was about 3.0 1 trillion yuan, and the rate of return was 1.9 1%. The relevant investment ratio is 26.47% in bank deposits and 0 in bonds; 7.88%, the equity investment is 13.33%. As the main institutional investors, insurance companies are playing an increasingly prominent role in promoting the stable development of the dance market. Insurance companies provide strong support for banks to improve their capital adequacy ratio and promote the reform of commercial banks by holding subordinated debts of banks; Insurance companies have invested in commercial banks, which has played an active role in improving the ownership structure and optimizing the corporate governance of banks.
Third, social management functions.
Generally speaking, social management refers to the process of regulating the whole society and its various links, with the aim of giving full play to the functions of various systems, departments and links, so as to realize the harmonious social relations, benign operation and effective management of the whole society. The social management function of insurance is different from the direct management of society by the state, but it promotes the coordination of economy and society and the normal operation and orderly development of all social fields through the inherent characteristics of insurance. The social management function of insurance is a function derived from the gradual development and maturity of the insurance industry and the continuous improvement and enhancement of its status in social development. The social management function of insurance is mainly reflected in four aspects.
(A) social security management
Social security is called the "shock absorber" of society and is an important condition for maintaining social stability. Commercial insurance is an important part of the social security system and plays an important role in perfecting the social security system. On the one hand, commercial insurance can provide insurance coverage for urban workers, individual industrial and commercial households, farmers, institutions and other workers who have not participated in the basic social insurance system, which is conducive to expanding the coverage of social security. On the other hand, commercial insurance has the characteristics of flexible products and wide choice, which can provide multi-level security services for the society, improve the level of social security and reduce the pressure on the government in social security. In 2008, the number of insurance employees in China reached 3,228110,000, which made positive contributions to alleviating social employment pressure, maintaining social stability and ensuring people's livelihood.
Social risk management
Risks are everywhere, and it is the common task of the whole society to prevent and control risks and reduce risk losses. Insurance companies directly respond to disasters and accidents from product development and rate setting to underwriting and claims settlement. They not only have the professional knowledge of identifying, measuring and analyzing risks, but also accumulate a large amount of risk loss information, which provides strong data support for the risk management of the whole society. At the same time, insurance companies can actively cooperate with relevant departments to prevent disasters and losses, and encourage the insured and the insured to take the initiative to do all kinds of preventive work by adopting measures such as differential rates, so as to reduce the probability of risk occurrence and realize risk control and management.
Social relations management
Dealing with disaster losses through insurance can not only compensate losses reasonably according to the insurance contract, but also improve the efficiency of accident handling and reduce all kinds of disputes that may arise between the parties. Because insurance participated in the whole process of disaster treatment and the management of social relations, it gradually changed the behavior pattern of social subjects, created favorable conditions for maintaining the normal and orderly social relations among the government, enterprises and individuals, reduced social friction, played the role of social "lubricator" and greatly improved the efficiency of social operation.
(D) Social credit management
A perfect social credit system is a necessary condition for building a modern market system, and it is also a fundamental solution to standardize the market economic order. The principle of utmost good faith is the basic principle of insurance management, and the products operated by insurance companies are actually a promise based on credit and guaranteed by law, which plays an imperceptible role in cultivating and enhancing social awareness of good faith. At the same time, insurance can collect the performance records of enterprises and individuals in the process of operation, provide an important source of information for the establishment and management of social credit system, and realize the sharing of social credit resources.
The three functions of insurance are an organic whole. Economic compensation is the most basic function of insurance, and it is also the most fundamental feature that distinguishes insurance from other industries. Financial intermediary function is developed on the basis of economic compensation function, which is the concrete embodiment of insurance financial attributes and an important means to realize social management function. It is precisely because of its financial intermediary function that the insurance industry has become an important asset manager in the international capital market, especially by managing pension funds, making insurance an important force in the social security system. The social management function of modern insurance is an important function after the insurance industry has developed to a certain extent and penetrated into many levels of social life. The function of social management can't be played without the realization of economic compensation and financial intermediation in many aspects. At the same time, with the gradual development of social management function of insurance, it will provide a broader space for economic compensation and financial intermediary. Therefore, the three functions of insurance are not only independent of each other, but also interrelated and interacted, forming a unified and open modern insurance function system.