An increase in interest rates by central banks can have a significant impact on insurance companies, their business model, and customers. Here are a few ways this could happen: Investment Income: Insurance companies typically invest the premiums they collect from customers in bonds and other fixed-income securities. An increase in interest rates can lead to higher returns on these investments, which can improve the profitability of insurance companies1. Liability Reserves: Insurance companies are required to set aside funds to cover future claims, known as “liability reserves.

Insurance has many advantages to society, as it helps to protect the wealth, health, and well-being of individuals and communities. Some of the advantages of insurance to society are: It protects society’s wealth by providing compensation for losses caused by natural disasters, accidents, theft, fire, and other risks. This reduces the burden on the government and the taxpayers to provide relief and recovery funds1. It removes social evils by alleviating the suffering and hardship of the victims of unforeseen events.

The concept of insurance, at its core, is about risk management and the distribution of risk among a group of individuals or entities. This practice has roots that stretch back to ancient civilizations and has evolved significantly over time. # Ancient Origins The earliest known instances of risk-sharing practices date back to ancient times. In China, as early as the 3rd millennium BCE, merchants distributing their wares across dangerous rivers would redistribute their goods among many vessels to limit the loss due to any single vessel’s capsizing1.