Definitions and functions of Insurance

Definitions and functions of Insurance
Many definitions have been given to the term insurance, which on the face there is no similarity between the definition of each other. This is understandable, because they are defined according to the perspective that they use in looking at insurance, which in accordance with the above description that insurance can be viewed from multiple angles.
The definition of these definitions, among others:
1.Definisi insurance
"Insurance or coverage is an agreement by which a guarantor is binding on the insured to receive a premium, to provide reimbursement to him for a loss, damage or loss of expected profit, which may be suffered due to an event that is not certain."
Based on these definitions, then the insurance contained four elements, namely: The insured (insured) which promised to pay the premiums to the insurer, all at once or gradually. The insurer (insure) that promises to pay a sum of money (compensation) to the insured, all at once or gradually, when something happens that contain certain elements. An event (accident) undefined (time unknown). Interest (interest) that may experience losses due to certain events that do not.
2. Definition of insurance by Prof Mehr and Cammack:
"Insurance is a means to reduce financial risk, by collecting exposure units in sufficient numbers, to make the individual losses can be estimated. Then the predictable loss was borne equally by those who belong to ".
3. Definition of insurance by Prof Mark R. Green:
"Insurance is an economic institution which aims to reduce risk, by combining in a number of management objects large enough numbers, so that the overall loss can be predicted within certain limits".
4.Definisi insurance by Arthur C. William Jr. and Richard M. Heins, which defines the insurance is based on two perspectives, namely: 'Insurance is a security against financial loss by an insurer ". "Insurance is an agreement by which two or more persons or entities to raise funds to cover financial loss".
Based on these definitions above would be about the definition of insurance that can cover all points of view:
"Insurance is a means to reduce the risk inherent in the economy, in a way manggabungkan number of units exposed to the risk of the same or nearly the same, in large enough quantities, so that the probability of losses can be predicted and if the predicted losses will occur will be divided proportionately by all parties in the joint ".
Insurance Function:
1. Risk Transfer
By paying a relatively small premium, a person or company can move the uncertainty of life and property (risk) to the insurance company
2. Collection Fund
Premiums earned and collected by the insurance company as a fund to pay for the risk incurred.