Socio-economic essence of insurance and its role in a market economy.

Humanity is living and working in certain conditions, natural and social environment. And throughout his life is constantly faced with various natural forces of nature, with occasional social events. During his life he acquires knowledge of the nature of some risks and on the other hand itself creates new kinds of risks, ie the existence of risk is constantly changing only their number and degree of harm to them. Therefore, important tasks of society is to identify risks and the related activities to reduce risk.

Risks can be limited to the following ways:

1. Arranged – achieved through the arrangements of liability to another (partner) with the inclusion of the item in the contract (ex: shifting the risk of carriage of goods by the company provider or carrier).

2. The division – ie risk-sharing in the implementation of major projects, which is attended by several artists, each one is responsible, within their share of participation (ex: large-scale construction).

3. Spread - this is possible with targeted business acquisition (ex: bank, to reduce the risk of not returning, dispels the issuance of loans to several companies)

However, all these measures are fully against the risk of not protect, and, as a rule, introduced measures to the formation of funds to compensate for the possible risks (insurance or reserve funds). Three ways of formation of such funds:

Ø State;

Ø legal and natural persons individually;

Ø insurance companies.

In East Europe there are two areas of insurance:

- The state, social insurance;

- Individual, private insurance, it is based on an insurance contract, the contract may be voluntary or forced.

A insurance financial implications, the bearing of certain types of risk is shifted to the insurer.

Signs of insurance:

1. Extreme, which links insurance with a degree of protection of social production;

2. Closed when the layout of loss among insurers based on the fact that the number of victims is always less than the total number of insured;

3. Recoverability of damages, in which more than covered by the insurer of Territory and the number of insured objects, the more efficient reallocation of funds payment (maximum damage for minimum contributions);

4. The recoverability of payments made in the said territory-wide average of 5 years.

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