you a quick guide to the history, nature, legislation, functions and
organisations of insurance in Malaysia
- To spread the financial loss of
insured members over the whole of the insuring community by
compensating the unfortunate few from the pool formed by the
contributions of all members.
- Freeing funds otherwise tied up in
reserves - Insurance substitutes a certain premium payment in
place of an uncertain loss payment. No prudent businessman would
invest large sums of money without suitable safeguards. In the
absence of insurance, large reserve funds would be necessary.
Insurance has the effect of releasing these reserves for further
investment and developments.
- Investment by insurers -
Insurers have accumulated funds over the years and a large
proportion of these resources are invested, therefore boosting the
overall development of the economy.
- Aid to credit - Seldom will a
loan be advanced unless the item being financed is insured.
- Provides employment - A large
number of people are directly employed in the insurance industry.
- Loss prevention and loss reduction
- Insurers encourage loss reduction and prevention by offering lower
rates and discounts to those who take loss prevention and loss