This document provides an introduction to general insurance concepts. It discusses that risk is the possibility of an adverse financial outcome from an uncertain event. Insurance handles risks by accepting, avoiding, reducing, or transferring them. For a risk to be insurable, any potential loss must be accidental, have an insurable interest, not be excessive, and not against public interest. Reinsurance allows insurers to transfer some risks to reinsurers to increase their capacity. Insurance functions in society include bearing risk, stimulating business, freeing up capital, and promoting loss prevention. The regulatory framework for insurance includes regulators, laws, consumer protection acts, and complaints procedures.

1. Introduction to General Insurance

2. The concept of risk
• Risk is the ‘effect of uncertainty on objectives’—the
chance of something happening.
• In the context of insurance it means the possibility of
an adverse outcome from a particular event.
• Insurance is only concerned with adverse outcomes
that involve the risk of financial loss.
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3. Strategies for handling risk
• Risks can be:
– accepted
– avoided
– reduced
– transferred.
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4. What are insurable risks?
• For a risk to be insurable:
– the loss must be fortuitous (accidental)
– there must be an insurable interest at the time the
loss occurs
– the loss must not be excessive or catastrophic
– it must not be against the public interest.
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5. Reinsurance
• Reinsurance allows insurers to reduce their
exposure to particular risks by transferring part of
the risk to a reinsurer, thereby increasing their
capacity to accept additional risks;.
• The types of reinsurance methods are:
– treaty
– facultative.
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6. Insurance in society
• The functions of insurance in society include:
– bearing risk
– stimulating business enterprise
– freeing up capital
– encouraging efficiency in commerce by providing
peace of mind and security
– promoting loss prevention
– assisting business survival.
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7. Session 2 – The regulatory framework
• This session covers:
– key insurance regulators and organisations
– insurance laws and consumer protection legislation
– other important Acts and Codes
– complaints and dispute procedures.
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