Policyholders

To insurance policyholders, as conceived by the insurance economist, the ‘concept of risk comprises two components—a detriment aspect and an uncertainty aspect’. As regards the detriment, by taking insurance, the element in the detriment, although no longer a risk but a certainty, is reduced to the level of the premium; and the inconvenience element is curtailed to the time it takes to find insurance and, if the risk strikes, to obtain indemnity. As for the uncertainty and whether the risk will strike, that is not reduced objectively. This chapter describes in detail the knowledge and assessment of risk and also deals with the market for insurance.