A3: Insurance & risk management - created from Mind Map

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Protect physical assets

Protect earnings & profit potential

Protect financial transactions

Premiums are pooled by the insurer to invest to grow value of reserves against inflation.

Key person policies allow companies to insure against death or long-term illness of individuals vital to income stream of company.

Risks too big to be covered by a single insurer are assessed & accepted but then passed to a reinsurance company for a proportion of the premium. Lloyd's of London offer a specialist insurance & reinsurance market through its underwritiing syndicates.

Derivatives are used to offset losses when protecting financial transactions.

Insurance & risk management

Notes