Concept of Insurance | Risk Management

Running head: RISK MANAGEMENT
Risk Management
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RISK MANAGEMENT
Insurance is a good first choice, and a good last choice, but hardly ever the best choice
for an organisations risk financing programs:
Early history:
The concept of insurance is quite old and popular in human society. In ancient times
the Babylonians and Phoenician had their ocean or marine insurance to secure their trade in
cases the ship did not reach its intended destination with all the goods or if there was any loss
of payment. Even in Rome varied associations had their own form of insurance coverage for
their specific members and during any of their family member being ill, injured or in funeral
ceremony of their dear ones the insurance gave them full coverage. Even during 17th century,
in England the concept of insurance who underwrite all types of insurances well built with a
form of syndicate formed by varied working professionals (Pearson, 2015).
Present day scenario:
Today with the changing nature of global business environment, the changing lifestyle
patterns, income patterns of individuals the concept of insurance has largely evolved. Today
the insurance schemes are mainly targeted to secure one from either financial risk, or act as a
risk transfer machine, act as an assistance to the community by supporting public industry,
boost commerce as well as assist government in its taxation and liaisons. The significance of
insurance is so widespread that even the Government of varied nations have taken serious
interest in mandating the provision of insurance through varied Acts and regulations like Life
Assurance Companies Act, or the Employers Liability Insurance Companies Act 1907 for
business security, personal wellbeing and for the larger good of the society (Rawlings, 2017).
Risk management in Business environment and role of Insurance:
The insurance market place does have multiple ways in transferring risk which is basically
concerned with commercial insurance and basically includes captives, risk retention groups,