Insurance as a factor of economic growth in the country

Insurance as a factor of economic growth in the country

In this installment we will try to discover how the insurance business, to interact with virtually all groups and sectors of society contributes to the sustainable economic development of the nation, and that way, by offering our customers products and competitive solutions for risk management, not only to demonstrate vitality as a financial institution, but also to contribute actively in the construction of our social and economic reality.

For the purposes of this paper, begin defining as insurance business, that mechanism of gathering financial resources where contracts regulated by law, many do small regular payments in Exchange for protection against uncertain events but with severe potential for losses that may occur to some. These events are known as risks.

The insurance business is the most perfect mechanism that society has to attenuate the impact of adversity in the level individually or collectively. It embraces and articulates the high concepts of responsibility, solidarity and security.

It meets the need to have individuals of having security and it is essential to maintain the financial stability of the family and to preserve their heritage.

Insurance products that may be required as the RCV policy are the Foundation of indispensable schemes of social protection to protect victims against the effect of the possible insolvency of the person who cause them damage.

The insurance activity also promotes and provides stability to the business sector. Many of the products and services that we enjoy today could be produced not be marketed without adequate support from insurance. For example, an importer of products would have to cope with the loss of an expensive boarding not contase backed by a transport insurance, or a farmer would be exposed to lose the investment in planting in case of a flood. In both cases, with the possibility to mitigate the effect of any loss, insurance not only helps to prevent costly bankruptcy, but it also frees capital that the entrepreneur had probably maintained in reserve to deal with any eventuality and that low insurance protection may feel motivated to invest to expand its productive activity.

One of the most important contributions of economic growth insurance is to provide the degree of security necessary to the economic climate, to thus encourage the employer responsible for to efficiently undertake more initiatives that still greater risk, they produce better investment returns, and that they had not been addressed without the support of instruments of protection that provides insurance in case of adversity.

In the financial sector, is becoming more noticeable the synergy and the close relationship of the sector with the insurance business. Insurance acts as a vehicle that strengthens and in many cases makes it possible to the granting of credit for consumers, promoting in this way both the productive investment and domestic consumption by facilitating access to assets such as homes and vehicles in favourable conditions for large segments of the population both the entrepreneur.

The insurance also has the potential to play an important role in the alleviation of poverty. So far, the insurance industry has failed to effectively penetrate the market consisting of the most popular classes of the population, but where from our modest point of view there are immense business opportunities that are perfectly compatible with the social interest and with the concept of a socially responsible company. That the poor do not pay, they don't buy insurance or is not cost-effective to serve them are myths and paradigms that so far have limited the immense social benefit that the insurance industry can contribute to society. On the other hand, empirical evidence suggests that the higher the penetration of insurance, lower the burden on the welfare State and increased the amount of resources that can be invested productively.

In conclusion, far from being a luxury that is only available to the most privileged sectors, insurance and their aggregate effect is no doubt an important factor of economic growth and social development.