CLASSIFICATION OF SELLERS IN THE INSURANCE MARKET

J.O. EMMANUEL
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Sellers in the insurance market are insurance companies that provide various forms of insurance products to those who need them.

Sellers in the insurance market can be categorized in two ways.

First, it can be classified based on the ownership structure of the insurance company.

Secondly, it can be classified based on whether the insurance company works with other insurance companies or directly with consumers.

Classification of sellers in insurance markets based on the ownership structure of the seller 

Based on the ownership structure, sellers in the insurance market can be divided into two types: proprietary insurance companies and mutual insurance companies.

1. Proprietary companies: These are insurance companies owned by shareholders through the subscription of their share capital.

In a proprietary insurance company, the shareholders elect directors to manage the affairs of the company each year.

The shareholders also have a right to vote at general meetings.

The liability of the shareholders is limited to the extent of the value of their shares.

It is important to note that shareholders are also known as proprietors in a proprietary company.

2. Mutual companies: These are insurance companies owned by policyholders, rather than by shareholders.

In a mutual insurance company, the policyholders are also known as members. 

The profits of a mutual insurance company are often distributed to the policyholders in the form of bonuses or reduced premiums offered to the owners (policyholders).

Classification of sellers in insurance markets based on whether the sellers deal with customers or insurance companies.

Based on whether the insurance company works with other insurance companies or directly with consumers, the sellers in an insurance market can be categorized into insurance companies and reinsurance companies.

1. Insurance company: This is a company that provides a wide range of insurance products to households and busyness

Insurance companies directly provide insurance coverage to customers, such as household buyers and business buyers.

Insurance companies provide insurance coverage directly to consumers. They do not provide insurance coverage to other insurance companies.

In the insurance markets, insurance companies are the largest suppliers of insurance products. Without an insurance company, there cannot be an insurance market.

2. Reinsurance companies: A reinsurance company is an insurer that offers insurance protection for a risk that has already been covered by another insurer.

Reinsurance companies provide insurance coverage to other insurance companies. 

This means they essentially act as risk-sharing for the original insurance company.

Reinsurance companies help insurance companies manage their risks by taking on a portion of the insurance policies that the insurance companies have underwritten.

Reinsurance companies play an important role in the insurance market because they help maintain the long-term sustainability of the insurance market.

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