What is Insurance Carrier? Definition of Insurance Carrier, Insurance Carrier Meaning and Concept
An insurer or insurance company is a company that is in charge of insuring risks to third parties, in such a way that it protects or safeguards material goods from the risks to which they are exposed.
The main mission of an insurer is to protect from the economic aspect those assets that are potentially damageable and are under some type of risk, such as a home, a car or even individuals themselves with life insurance. In this way, if an accident or eventuality occurs to the protected area, the company will be in charge of correcting or repairing the damage.
Characteristics of an insurer
In exchange for this type of protection, the insurance company requires periodic payments, also known as installments or premiums, for this coverage to take place. The amount of these payments is usually determined by the level of risk that the company calculates when offering coverage against damage, injury or loss.
Through a contract with its corresponding clauses and conditions, the insurer and the insured agree on the conditions in which this risk protection relationship is carried out and the way in which the insurer fixes possible damages or pays an amount of money to the other party in case of accidents or other situations. This document is also called an insurance policy.
For an insurer to be able to undertake a large number of contracts and protect a large number of accounts and clients, it is necessary that it have a considerable reserve in order to have a high solvency margin against future payments related to its economic activity. That is why the market for insurance companies has a great size and importance, being a pillar of the financial market together with banks.
There is also the possibility of any commercial company acting as an insurer, from the most common corporations to cooperatives.