What is the primary function of the "insurance business"?

The primary function of the insurance business is to issue insurance policies that provide protection against various risks. Insurance serves as a mechanism for managing the uncertainties of potential financial loss by transferring the risk from individuals or businesses to the insurer. When a policy is issued, it establishes a legal contract between the insurer and the insured, outlining the terms of coverage, the risks covered, and the obligations of both parties. This contract enables individuals and organizations to mitigate the financial impact of unforeseen events, such as accidents, illnesses, or property damage.

While managing claims, conducting risk assessments, and providing financial advice are important activities within the insurance industry, they are secondary to the fundamental concept of issuing insurance policies. The core purpose of insurance is to provide security and peace of mind through coverage, which acts as a financial safety net for policyholders.