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| − | In [[The Personal MBA|The Personal MBA]] an ''insurance'' focuses on transferring a risk from purchaser to seller in exchange for a series of payments. It is one of the [[Twelve standard Forms of Value|Twelve standard Forms of Value]] (Form of Value #11 of 12). If something bad happens the insurer is responsible for the bill, and if it doesn’t, the insurer keeps the money. Insurance provides value to he purchasers by protecting them from downside risk. Insurance works because its spreads risk over a large number of individuals. Insurers have in avoiding 'bad risks'
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| − | =Key Points:=
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| − | * Insurance focuses on transferring a risk from purchaser to seller in exchange for a series of payments. If something bad happens the insurer is responsible for the bill, and if it doesn’t, the insurer keeps the money.
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| − | * The keys are:
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| − | ** Create a binding legal contract that transfers the risk of a specific bad thing happening from the policy holder to you.
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| − | ** Estimate the risk of that thing happening using available data.
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| − | ** Collect the agreed-upon payments over time.
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| − | ** Pay out legitimate claims upon the policy.
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| − | * Insurance protects the purchaser from a downside risk.
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| − | * It works because it spreads the risk over a large number of purchasers.
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| − | * Insurers focus on maximizing payments while minimizing claims, and must be on the lookout for “bad risks” and fraudulent activity.
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| − | =Questions for Consideration:=
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| − | * Does delivering value via offering insurance make sense for your business idea?
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| − | * If so, what do you need to plan for to make it successful?
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| − | Source: http://book.personalmba.com/insurance/
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| | [[Category:mbi]] | | [[Category:mbi]] |
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