Property Insurance and the Technological Influence
From times unknown, humans have been a very paranoid specie. We fear about the outcomes that are to come and the actions that will trigger them. This makes us a little fearful of what we do and even more of what is to come. We therefore seek ways to make our steps firmer and the future less unpredictable.
The Insurance Sector
This perpetual uncertainty has led us to explore various methods of diversifying the risk that the future carries and insurance is one field that has emerged out of this uncertainty. Statistics today suggest that the value of Insurance Premiums today is $5 trillion worldwide which makes this a huge segment. However, this fact on its own can seem very crude. This is largely because the insurance sector is made up of several different segments that often function independently and offer various services.
There are several different types of insurance. The biggest ones today, however, are Life and Health Insurance. These types of insurance accounted for around 52% of the total insurance. In a life insurance, you save a premium with the agency over a certain period of time. This is saved throughout your life and in case of your death, you get a sum over and above what you saved awarded to your family.
Health Insurance, on the other hand, works in a slightly different method. You can save up a premium over several years. During this time, if you get involved in an accident and are admitted to the hospital, the insurance agency will take care of the bills. But that does not mean that if you do not, then your savings will just lapse. Health insurance has a maturity and if you continue saving with them till that maturity, you get paid over and above what you saved.
Technological Influence Over Insurance
That is not all. The field of insurance is constantly growing and attracting development of all sorts. For instance, the field has already attracted much of technological innovation and you can even find organizations catering to customers with a virtual receptionist in Australia. However, not just in odd jobs, the technological influence extends to the specifics of the insurance agency and takes it to new heights.
For instance, insurance organizations are coming around to the idea of using drones and virtual machinery that employs Artificial Intelligence to assess the validity of claims presented by clients. Technologies such as drones are even being used already to monitor sites with accidents. Moreover, organizations offering insurance services are also using data sciences and big analytics to sift through their historical data and generate trends that make their premium calculations and financial analyses easier. This way, the agency picks the right insurance choices and makes the right decisions for their customers.
How Does the Insurance Agency Work?
Although none of the above-mentioned information confuses people as much as answering how insurance agencies are able to pay more than what you saved at the end of maturity. Well, this happens through the use of financial analysis and a concept called “the time value of money”. This time value of money dictates that the value of money erodes over time due to a rise in inflation. So, if I were to save money somewhere, I would want a return on it to compensate for the value lost in monetary times.
To get this return, the insurance agency invests the funds they receive in carefully selected stocks. As these stocks pay dividend, the amount of money to be returned to you increases while the insurance agency keeps a margin for its own self for providing the service.