Adaptation to Climate Change

           Insurance can help improve understanding of climate change issues because the reach and extensive resources. The insurance company may establish a commission to analyze risk scenarios that include predictions of leading scientists to model the risk insurance offered by agents of the risk modeling. These studies may provide new information and more accurately about the risks that may occur to the people, houses, and businesses large if climate change really happening as predicted. Insurers in this case can work with the pemodel and scientists to improve the accuracy of climate change models. With menciptakanpermintaan of economically relevant knowledge, insurance companies can provide a great service to the community and their customers. In particular, insurers can also build partnerships with NGOs working in the field of environmental or other parties to provide different perspectives and expertise to the problem and build the strength of multi-sector collaboration strength.

            General insurance can also help send a signal of risk as an indirect effort to tackle climate change. This is done by cooperating with the government to allow adjustment terhada homeowner insurance rates and flood insurance. This amendment would establish a more appropriate price and risk signals to consumers and businesses engaged in high-risk areas. In this respect cooperation in terms of price flexibility will be very important. Insurance can also express and informed risks and possible climate change in annual reports and other corporate communications. More and more institutional investors and money managers who want a gift ifnromasi on climate change from an insurance company. In fact, there are also associations formed by investors as an investor network on climate change which represents 50 institutional investors and manages funds amounting to three trillion dollars. In many cases, insurance can also provide incentives to reduce emissions of greenhouse gases that exacerbate climate change through the use of energy efficient buildings or "green" and the use of hybrid vehicles and other energy efficient. Finally, insurers can take a proactive approach in influencing the development of land use and planning.
            The things that can be done to prepare for the insurance company and adapt to climate change is to adapt directly the impact of environmental change through the promotion and lobbying for good building materials and building design has been improved. In terms of driving the vehicle, the insurance company can also tighten security procedures which will be borne by the insurance company. Also necessary to check how the physical impacts of climate change could create business opportunities through environmental improvements and new products. In addition, insurers can also perform an internal operation that takes into account factors other climate changes.

General Insurance Benefits in Facing Climate Change

    In the last two centuries, human activity has increased greenhouse gases, like carbon dioxide (CO2), which retain heat in the atmosphere of the sun such as blankets, warm climate of the earth and created the "global warming". Since the industrial revolution, the average temperature on earth has risen sharply and very quickly. Studies show that increases in air temperature in recent years may lead to an increase in frequency and severity of natural disasters such as tropical storms and hurricanes. This and other changes would give big consequences for life on earth.            World business community began to realize that climate change may lead to physical risks and risks related to weather in the future. Vice Chairman of Merrill Lynch recently stated "We were doing chemical experiments with a large dahysat consequences of our environment, our economy, and human life." While the parties from Goldman Sachs in its environment policy statement in 2005 stating that climate change is one of the greatest environmental challenges of the twenty-first century and is closely linked to other important issues such as economic growth and development, poverty eradication, access to clean water , and supply enough energy.
            Some of the latest scientific discoveries states some alarming facts, namely that the global sea level rise is expected to rise an average minimum of 0.28 m in this century. Besides the risk of forest fires will be exacerbated by natural trends such as rising air temperatures, drier conditions. Climate change is also expected to affect the hydrological cycle, which can cause flooding. Even flooding is likely to cause major economic losses in future years. The temperature of the warmer seawater will also very likely increase the intensity of hurricanes. All these facts coupled with large population growth and increased investment in a region highly vulnerable to the damaging effects of climate change.
            According to the Action Agenda is composed of insurance companies and the WWF in 2006, there are many activities that can be done by insurance companies and industry associations. In this case different solutions will suit different companies depending on their portfolio of products, corporate culture, and relationships with local and central government. Examples of activities that can be done the insurance and associated industries to reduce the physical impacts of climate change, or adapt to the impacts consist of three main steps, namely: improve understanding (understanding) will be problems, mengirim a stronger signal of risk to the community, and prepare and adapt to climate change.

Social benefits to society of General Insurance

            From the social side, the benefits of insurance to the insurance are also very large. By helping people confront and manage risk effectively, insurers give a great contribution to our lives.Insurance enhance existing standards by giving emphasis to factors which may cause insecurity. According to the Association of British insurers, insurance provides five strategic advantage indirectly (indirectly) to the community, namely: a) freedom from things that can damage the structure of assets and liabilities of an individual or business; b) security in the home and workplace from the threat of accident , robbery, fire and natural hazards; c) Health is better than the additional investment in medical costs and an emphasis on rehabilitation; d) wealth by supporting the spirit of entrepreneurs, innovation and risk taking, e) flexibility with the individual's suitability to the conditions and produce economic and social life that is not too dependent on government action.
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             Insurance is free does not mean that we can do anything even violates the contract agreement with the insurance though. We still have to comply with the contract of insurance premium payments, covenants and restrictions that apply. Give freedom in this context means that the insurance helped us to achieve our goals by transforming the chaos that might occur to the risks can be managed.
 Without such insurance, a driver will be risking all of his assets each time they leave the garage because the accident will make them open for lawsuits against damage. One fruit of evil can bring great damage to a business. Insurance will run the new technology and products to be tested without fear, where before the failure could have bankrupted the people who try to promote them. Of course some people will still take big chances, but millions of us will follow the lives of more careful, not too challenging and less productive because of the fear of liability that can destroy us we already have.Even something that looks unusual, such as the housing market depends on the availability of insurance; if there is no home insurance, would be difficult to imagine those families wishing to invest their entire fortune in a fortune. Therefore, the modern economy, creating wealth on a scale never seen before, full depends on the insurance.
            In creating the security, the insurance industry worked closely with police investigations. However, the main contribution coming from the insurance does the job every day with policyholders through research on crime prevention. This encourages better handling of criminal activity from time to time. Unfortunately, some of the most vulnerable to crime is the least able to obtain additional security because of financial difficulties. In developed countries, which requires vehicle insurance, group insurance industry assess its safety features on cars and encourage the suppliers to improve the safety car so that their model will encourage lower insurance premiums. In addition, the insurance also guarantees security against fire, safety and insurance to drive.
            The impact of insurance on the increase of wealth done with the knock limit of the business, product innovation and technology by providing a safety net for entrepreneurs. This tendency of investors to break the chains put their money in the "safer" than the field that changed. Oil and gas industry is a good example for the industry with high potential risks which construction is supported by insurance.Insurance helps to guide and encourage increased business investment, by showing the real costs of the risks to the individual companies and industries. Insurance covered almost all the costs of business obligations. Without insurance, many companies are better able to close due to a very temporary problem. Having insurance means that individuals and businesses do not need to maintain excess cash reserves to protect themselves against risk. Insurance freeing them to spend and invest.
            Strong insurance industry to make life more flexible and not dependent on government funding. In this case the insurance industry to make life easier for taxpayers by reducing the demands that may be due to the prevailing welfare system. Private insurance often can provide a benefit that is more targeted to the needs of users, and can be done in a lower cost, than can sometimes be provided by the government. It also allows for an injured party to sue for damages rather than seek help from the government. Described the general insurance can pay for hospital care due to accidents due to driving accidents even when working.

Relationship between Insurance and Indemnification Agreement

To carry out the functions of investment, insurance companies build the assets after receiving the premium paid in advance. By investing in a productive, insurers can generate income level that allows them to pay a lower premium rate. The insurance company can even improve efficiency in the financial system with a financial liaison party, where they reduce transaction costs that unite storage and borrowers. The insurance company also generate liquidity by using premium income to provide long-term capital. The insurance company also facilitate economies of scale in investment. By collecting large numbers of thousands of policyholders, insurers can achieve the financing needs of large projects, thereby increasing the set of possible investment projects and encouraging economic efficiency.
            Finally, the role of insurers in improving the economy emerged from its ability to provide risk management advice. Many commercial insurance contracts covering the provision of risk management services. Insurers may be assessed against potential losses, as part of the underwriting process. This is a special feature called the insurance "risk that the guarded / highly protected". The insurance company supports many programs, loss of control as the form of fire prevention, health and safety, loss prevention industry, reduction of car damage, theft and injury, and more. This reduces the direct and indirect losses to businesses and individuals. Companies that try to mengansuransikan he has special knowledge needed to reduce these losses. Because the insurance company guarantees most, if not all of the risks, they have a strong incentive to reduce the costs of losses.

Insurance and Risk Assessment

General insurance also encourages the formation of a good compensation system. Compensation system (which is pay damages to the affected brands through carelessness of other parties) is difficult to operate effectively without the liability insurance market is healthy. Without the presence of liability insurance, the court may impose penalty payments for property damage pencedera.This allows each person or organization involved in activities that are dangerous to operate in a minimum level of assets (judgment proof) to avoid paying damages to third parties.As a result, the parties can not obtain compensation dicederari (and therefore had to snitch on a system that applies), while the amount paid will depend on the ability pencedera, not on the magnitude of losses suffered by other parties. Further, players an incentive to reduce the risk largely disappeared. Conversely, the efficient treatment of liability insurance not only provides resources to compensate the injured party and the incentive to maintain, teatpi also lower costs than schemes based on third-party payment systems and regulations.

Economic benefits to society of General Insurance

            From the macro side, according to the Insurance Council of Australia, the insurance market effectively and efficiently is a fundamental tool for an advanced economy. Through the general insurance industry, the economy and economic agents can transfer and provide price risk, allowing them to better allocate resources to contribute to the growth / higher investment and living standards are also higher. As a driver of economic, general insurance contributes directly to economic growth by: a) assess the risks and risky activities, b) improve resource allocation in the economy, c) reduce transaction costs between the parties when they want to move the risk of sensitive risk (risk-adverse ) to those who are willing to bear it (risk takers), d) supports economic development by facilitating the investment at a higher risk of what can be borne without the presence of market risk, e) invest the funds of insurance premium on deepening (deepening) the range of capital available for investment objectives, f) reduce the burden of government / public sector in the event of damage or a severe natural disaster, thus also strengthening public financial management, g) supporting the realization of the principle of joint liability and personal responsibility in individuals and communities to protect from loss and damage, h) reduces the loss on the wider community through a strategy minimizing risk (risk mitigation).
            Explanation of the macroeconomic functions of insurance can be seen from the five main viewpoints which transfer the risk (risk transfer), the risk-based assessment (risk-based pricing), pushing compensation law, the investment function of insurance companies, and advice in risk management functions.

Risk Control Mature vs Unexpected Loss

            To better understand the benefits of General Insurance to manage risk, we can see an example of what is experienced by a family in their activities. Let's take the example of family and family Anton Louis, both of which are medium-sized family living in two different countries. Anton's family live in developing countries who have not applied the insurance policies so that less aware of the risks while the family lived in the country Louis, which requires the general insurance policies in many aspects and is very aware of the risks and the importance of management.
In the same year, the result of savings from working for four years for each of 800 million rupiah, the two families decided to build their own business with a value of 600 million rupiah. At the beginning of doing business, the family chose not to take Anton's general insurance policy to protect its business because it felt it was "safe" and loss of pay for insurance policies that are considered expensive. While Louis-conscious family decided to take the insurance risk management for business by setting aside $ 20 million each month to pay policyholders.Three years later, when both are enjoying the growing stage in his business occur unexpectedly shorted (short-circuit) that caused a fire at the family's place of business second. All equipment and raw materials sold out eat the red rooster. However, families do not look desperate Louis Anton family after the incident. Two weeks after the insurance claim process done and inspections from inspectors losses (loss adjusters) is completed, Louis Family redress that they need to rebuild their businesses as usual. They can retain the best workers who recruits, maintaining relationships with suppliers and most importantly, continue to maintain the market share of its products to consumers. As for the family of Anton, because they do not have insurance, are forced to work harder and raise more money in future years in order to rebuild their businesses. Because less aware of risk, business and business learning process that has been done by Anton's family over the years seem wasted away in the snap of a finger.
            Louis families can protect their business by buying some types of general insurance. If business use of vehicles, he can mengasuransikanya. How much protection that will be enjoyed depending on the insurance agreement is made. If business use of buildings, Louis family can also use the building insurance to cover the cost of repairing or rebuilding if the buildings are damaged by the events that are not predictable. In addition there are also insurance for the contents of the building (Home contents insurance) to cover such items as clothing, cabinets, electrical appliances, carpeting and so forth.

General Insurance Benefits in Human Life

           We live with risk management. Starting from our eyes open until we fell asleep and woke up again, we bear the burden of risk on themselves, their families and not behind all of our belongings.Someone wisely said that if he could take into account the existing risk in the future and anticipate starting from scratch. Simply put, this is the principle underlying the birth of General Insurance.
            Like a bear Life Insurance soul / life, general insurance cover and transfer the risk of losing our wealth, health and everything that is not covered by Insurance. Awareness of insurance depart from the human experience that a lot of undesirable things can change direction later in life. The situation that seemed brilliant at once can become so bleak and difficult. It would be futile, for example, if the events that happen outside our control, such as floods, fires, riots destroyed the results of our hard work in the blink of an eye. Without a thorough risk control, is not impossible that the events that are not desirable in the future (unforseen events) are forcing us to collect the treasure we start from point zero (start from the scratch) because of damage caused.
            In practice, the scope of General Insurance including home insurance, car insurance, travel insurance to. Unlike life insurance which covers the events that must happen sooner or later, such as retirement and death, general insurance was to shield us from things that are uncertain but may occur, such as accident, fire or theft. To that end, the main objective is to take an insurance policy to compensate us after the occurrence of a loss (loss), so that our lives will generally just as good (as well off as) before losing it to happen.

Understanding Insurance

Life is full of unexpected risks or unexpected, because of that we need to understand about insurance. Some natural events that occurred in recent years and takes a lot of casualties, both fatalities and property, such as reminding us of the need for insurance. For every member of society including the business world, the risk for experiencing disadvantage (misfortune) are always there (Kamaluddin: 2003). In order to overcome the losses, people develop a mechanism that we now know as insurance.

The primary function of insurance is as a mechanism to transfer risk (risk-transfer mechanism), which shift the risk from one party (the insured) to another party (the insurer). Transfer of risk is by no means eliminates the possibility of misfortune, but the insurer to provide financial security (financial security) and tranquility (peace of mind) for the insured. In return, the insured pays a premium in a very small number when compared with potential losses that may be suffered (Morton: 1999).

Basically, the insurance policy is a contract that is a legal agreement between the insurer (in this case the insurance company) with the insured, whereby the insurer willing to cover some losses that may arise in the future in return for payment (premium), some of the insured.