The Advent Of The Insurance Industry

Benjamin Franklin helped to establish in 1752, what it would be the first mutual insurance company. For many years, the United States government never considered necessary to incorporate a system that would compensate their citizens in case any injury, accident or loss happen to them. It wasn’t until 1735 the first underwrote fire insurance company was created; in Charleston, South Carolina. Underwrite insurance companies are the ones, that analyze all the risk of insuring a particular person or asset and uses that information to set a premium pricing for insurance policies. But it took 20 years to create the first mutual insurance company, one in which policyholders would come together to share the risk.

State Farm was founded in 1922 by a retired farmer and insurance salesman, George Jacob "G.J." Mecherle. Mecherle’s original vision, to operate fairly and do the right thing for the customers, still guides the company today. What started as a single line auto insurance company, has now grown to an entity offering nearly 100 products and services to help customers manage today and prepare for tomorrow. Currently, the company handles nearly 35,000 claims per day, which demonstrates its level of commitment to policyholders. State Farm offers access online and offline through statefarm.com, or through one of more than 18,000 agent offices nationwide. Over the next few sections, State Farm’s mission, culture, and family of companies will be discussed as a summary of the organization and its achievements.

The first insurance policies in the United States were issued around the middle of the twentieth century. Property insurance covers loss associated with a variety of damage and typically protects the homeowner against natural events, like forest fires, hail storms and hurricanes, as well as man-made causes such as vandalism .

Insurance has become an essential commodity that has helped cut cost of expenditure an individual, a company or a society as a whole can incur for health, business, leisure, personal belongings, utilities and just about living. In health particularly, it has greatly protected individuals and families from financial losses due to diseases and health conditions. It is a given fact that an average cost going to a hospital can be a tremendous amount an average family would not necessarily afford. Blue Cross Blue Shield of Illinois, a private insurance company in the United States suggested that “The average cost of a trip to the emergency room for an adult is about $700, not including any tests or hospitalization, which may increase the bill to well over $1,000. A broken leg can cost up to $7,500. Average costs for childbirth are up to $8,800, and well over $10,000 for C-section delivery. The total cost of a hip replacement can run a whopping $32,000.” Having insurance for simple to minor procedures have helped sustained these expenses and in one way or another have directly and indirectly saved billions of lives of insurance policy holders and their respective families. This is the very reason why people have found it as a basic need together with food, shelter and clothing. Insurance policy holders are increasing by the day. Depending on their needs, people now have a variety of insurance coverage to choose from.

Let us take a moment to focus on the employee side of insurance. Lacking access to many of the professional research databases, many small businesses (including accounting firms) use Google as their main source of finding information. Sadly, this means that many fall prey to misadvise. Jeffrey Joyner, in his online article on small business health insurance states, that it is allowable for the employer to reimburse the employee for their health insurance premiums (Joyner J., 2016). However, IRC § 9831 (a)(2) states that if an S corporation maintains multiple arrangements for either shareholders or employees (and they are not covered by family coverage), the arrangements will qualify as a group health plan; and thus may eventually be subject to excise taxes under ACA market reforms. Mr. Joyner is partially correct; as long as the S corporation has only one participant in the plan, it is exempt under the “fewer than two participants who are current employees” IRS Notice 2015-17 exemption. Additionally, it is stated that employers that continue to reimburse individual plan payments, “after June 30, 2015… may be liable for the Code § 4980D excise tax” IRS Notice 2015-17.

Most of us have to think in terms of acquiring the insurance policies, thanks to the uncertainties of life. Not any thing on the planet is predictable of how longs the things will keep moving smoothly and this is the concern that compels people to go for the various insurance policies. However before obtaining a policy a proper amount of tips and ideas to be had is advisable to avoid any inconveniences in the future. Two main kinds of the insurance policies are obtainable viz. Term living indemnity and whole living indemnity

In the hope of reviving the debate of whether coverage provisions should be constructed broadly and exclusion provisions narrowly in the formation of an insurance contract, the main premise of this paper critically analyses arguments for and against

With the guarantee of payment the first provider health care program was born. It was called Blue Shield. Blue Shield’s role was to “negotiate with doctors and hospitals for reduced prices in exchange for a high volume of customers and guaranteed payment. To make up for the loss of revenue, doctors and hospitals raised their prices for patients who did not have group health insurance” (1). A lot companies during the 19040s and 50s were able to offer their employees health care benefits, but for some this was not an option. Many of Americans and small businesses during this time period could not afford group health insurance. This meant that the government had to come up with new programs to provide coverage for the uninsured people.

MetLife originally began as a company named the “National Union Life and Limb Insurance Co. It started in 1864 by several business men from New York. Business wasn’t going to well so after a few years and some name changes, James Dow, who was the President at the time and board of directors decided to focus only on life insurance and that’s where MetLife emerges. MetLife officially began its business in 1868. It consisted of six employees in an office composed of two rooms (MetLife Begins, 2014).

This report provides an overview of the Health Insurance Industry and its attractiveness. The health insurance industry is in the maturity stage of its life cycle and consists of many companies with only a few major players making up almost half of the market. The largest of these companies is UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc. and Cigna Corporation.

The expense of protection is resolved utilizing mortality tables ascertained by statisticians. Mortality tables are factually based tables demonstrating expected yearly death rates of individuals at various ages. Put essentially, individuals will probably kick the bucket as they get more seasoned and the mortality tables empower the insurance agencies to figure the danger and expansion premiums with age likewise. Such gauges can be vital in tax collection

Though the concept of insuring one’s belongings has existed for thousands of years1, the number of

6.Large Number of Insured Persons :-To spread the loss immediately, smoothly and cheaply, large number of persons should be insured. The co-operation of a small number of persons may also be insurance but it will be limited to smaller area. The cost of insurance to each member may be higher. So, it may be unmarketable. Therefore, to make the insurance cheaper, it is essential to insure large number of persons or property because the lesser would be cost of insurance and so, the lower would be premium. In past years, tariff associations or mutual fire insurance associations were found to share the loss at cheaper rate. In order to function successfully, the insurance should be joined by a large number of persons.

Allan Willet defines insurance as “that social device for making accumulations to meet uncertain losses of capital, which is carried out through the transfer of the risks of many individuals one person or to group of persons. Wherever there is accumulation for uncertain losses, or wherever there is a transfer of risk, there is one element of insurance; only where these are joined with the combination of risk in a group is the insurance complete”(willet 72). As we understood insurance is important for peoples. But ages changed and it is continuing change. Everything goes digital and insurance companies or insurance agencies and brokers must try to adopt new age. All of them have competitors so they have to react immediate action for the costumers request or solve problems or offer a best price and a proper offer about costumer’s policy (bill of exchange). Also the digitalization gives important benefits to companies. Some research show that in the traditional selling method, i.e. the broker the sales, per transaction price is 19$ meantime for call-centre process price goes down 8 $ and for internet selling the price hit rock bottom as a 0.45 $. Information technology has helped firms to penetrate new markets, develop new channels/opportunities for product distribution, increase/decrease product differentiation, and centralize/decentralize operations geographically (Benjamin et al., 1984; Cash and

The global insurance industry seems to have escaped the worst of the financial crisis in comparison to other financial institutions. Day to day business has been relatively unaffected but the area that gave the most cause for concern has arisen from exposures to risky financial instruments. “The Reactions Magazine’s Global Insurance Conference 2009” was held in Swissotel, Zurich, Switzerland. At this conference the financial services industry tried to re set itself following the worst crisis for years. (www.euromoneyseminars.com). Insurance is an established industry. Like other companies insurance is facing increased competition from global players. It has been difficult for insurers to accomplish profitable growth, so