Operations: Insurance

Insurance can be used to reduce risk.

Insurance companies maximize
profit by paying out less than they
take in.


Insurance companies may reimburse
losses as long as...

  • Losses are not controlled by the
    insured.
  • The hazard is geographically
    widespread.
  • The probability of loss is predictable.
  • Losses are measurable.
  • There is an insurable interest.
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