Answer:
PERSONAL FINANCE INSURANCE
What Is the Main Business Model for Insurance Companies?
PERSONAL FINANCE INSURANCE
What Is the Main Business Model for Insurance Companies?
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Fact checked by KIRSTEN ROHRS SCHMITT
on July 28, 2021
Insurance companies base their business models around assuming and diversifying risk. The essential insurance model involves pooling risk from individual payers and redistributing it across a larger portfolio. Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage, then reinvesting those premiums into other interest-generating assets. Like all private businesses, insurance companies try to market effectively and minimize administrative costs.