Ever wondered how insurance companies generate so much wealth?

By Henri Pearson, 9th December 2019

Insurance companies spread risk, when insuring your property, personal belongings or even your life with an insurance company you don’t expect the insurance companies to dissolve due to bankruptcy, but some do.

Insurance companies that insurance across a number of states or county’s or larger insurance companies are more likely to stay in business during a natural disaster than those that only cover certain areas, certain products and even certain individuals according to leading researchers from leading UK universities including Oxford.

The more preparation and risk models that insurance companies put in place the more protected the firms are from liquidation during a natural disaster or a major life event that could cause the number of insurance claims by companies, people or governments to increase. Some of the larger insurance firms have their own secondary insurance policies in-place to protect themselves from bankruptcy during major event’s or a major crisis.

Risk models that have been developed by a number of insurance researchers show that insurance firms that develop plans and models see lower spike’s in risk and claims than those that don’t during natural disasters such as hurricanes, flooding, major storms, fires or in some cases the event of war.

The Australian wild fire's have caused detrimental damage estimated to be in it's hundreds of millions, insurance company will have prepared for this kind of disaster but will be fitting the bill of their clients claiming hence why this method would protect them in the event of a disaster like this.

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