General insurance How does insurance companies make money?

[sincerem]

When you look at the kind of benefits attached to what insurance offers per insurance scheme. You'll come to ask yourself, 'how do they make their own dividends to cover up all their expenses. Cos surely calamitous things occur, cos we are living in a world that is filled with uncertainties of natural disasters.

And those customers suffer lots of life challenges, losing their business based on uncertainty in the guise of covid19 and other unforeseen circumstances. Facing complucated life threatening illness, Some encounter brutal accidents and their cars destroy in the process. And some also see their fine buildings burnt down by fire from unknown source. All this things are financial draining to insurance companies.

How do they make their own dividends to cover up all this cost??

 

[btaliat]

There are several ways by which insurance company can get fund. Most time, they get money through the premium that insured people pay for their company. And most time these premiums are a huge sum of money depending on the insurance scheme. Most time, insurance company is co-owned by set of people and not only one person.

 

[sincerem]

There are several ways by which insurance company can get fund. Most time, they get money through the premium that insured people pay for their company. And most time these premiums are a huge sum of money depending on the insurance scheme. Most time, insurance company is co-owned by set of people and not only one person.

Yes, I understand that insurance is co- owned by group of persons who is always working handy to get this insurance company moving forward. At times the insurance customers reward doesn't occur, which is their own gain, for an unexpected circumstances as stated by the insurance company. The high premium subscription of the insurance company also brings revenue for them.

 

[Mika]

Yes, the premium these insurance companies collect is one of the sources of revenue that they use to make coverage. However, this revenue is never enough to cover the insurance policy because when a business or an individual files claims, the amount is way higher than the total premiums they have paid.

 

[sincerem]

Yes, the premium these insurance companies collect is one of the sources of revenue that they use to make coverage. However, this revenue is never enough to cover the insurance policy because when a business or an individual files claims, the amount is way higher than the total premiums they have paid.

Hmm, that has prompted me to draw this question here since what's stated in the premium is by far more than what they're receiving from the individual seeking. Cos if anything goes wrong in the individual's life and its in agreement with what the insurance policy carries. That gonna be lost for the company.