UNDERSTANDING INSURANCE: What are the mechanics of insurance? What is the future of this industry?

Like the alchemists, the insurers seem to have the ability to create wealth with their own philosopher's stone. How could they fulfill their promises when collecting rather small premiums to cover the house of a person or her life? Having spent more than 20 years in this industry, the author noticed that only a few people from within, understand the business model and its risks but also its financials. In this regard, the secrecy which surrounds this industry might not help those who want to find answers to their questions. How do insurers come up with an insurance premium? Why do insurers buy sovereign debt or invest in long-term investment opportunities? Why do we say that the balance sheet of an insurance company is liability driven? We are also reading everywhere that the surge of Insurtechs disrupts the insurance and a digital transformation wave is taking place. How can we distinguish truth from falsity in these statements? This book is to provide answers to all these questions. The author offers some details about insurance and its mechanics with the help of simple examples. This book is not about actuarial sciences, although there will be some calculations displayed in a few chapters. The objectives are to provide the tools and some basics to anyone (customers, investors, consultants, students or employees) who what to understand insurance.