The role and effects of insurance

1. Aspect of economic - social

The risk of losses arising from damage to the object: material wealth created by humans, and humans themselves, disrupting the daily life of the population, production stalled economy . Generally it to interrupt and reduce the effectiveness of the process of social reproduction.

Insurance Reserve Fund is to create a conscious, remedial above, offset by the losses incurred to re-establish and ensure the continuity of the regular social process. Thus, on the whole range of social economy, the role of insurance as a safe tool and redundancy to ensure long-term operability of any subject population and economy. As such, the insurance penetration depth all aspects of life has taken its inherent impact: promoting awareness to prevent and limit losses for all members of society.

2 Financial Aspects

Insurance product is a special service: a commitment to ensure the safety (the safety) moreover it is a commodity in the commercial insurance market. Insurance Organization activities as a unit providing a product and service to society, to participate in the distribution process as a unit at the stage of the national financial system.

On the other hand the existence and development of the insurance activities not only meet the safety requirements (for individuals and businesses) but also considerable demand keeps growing capital of the reproduction process large mines, especially in the RHI economy. With the principle of charging advance, the insurance organization activities occupy a very large monetary funds to show their commitment to their clients but temporarily idle.

And so, the insurance organization operations have become major investors, is important for the other activities of the national economy.
Insurance is therefore not only play the role of a safety tool, but also the role of a financial intermediary, holds important part of the industrial enterprises and large commercial.

With the above role, effective insurance is very important for the economy, especially in economies operating under the transition to the market economy. The main effects are: focus, ensuring capital accumulation process reproduce regularly and continuously. This effect is even more important to our country today when it can contribute positively to the increase of the capital from internal economies, mobilize and utilize the most thoroughly funds Currency in scattered populations.

Because of the aforementioned positive effects of insurance, but in any country whether developed or developing world, governments are always looking for different ways to promote and encourage the development of insurance activity, increase the number of compulsory insurance, reducing income tax exemption for the insurance business, personal income tax levied on the sum insured is entitled to receive insured, creating favorable conditions for insurers to invest ...