An insurance company is an organization that sells insurance policies
and assures security for the client or administrator. Insurance
companies are in the business of providing financial protection
against risks involved in property, houses and health. They make
profits from the premiums paid by their clients. This money is
technically termed "float," and the success of an insurance company
will depend on the success of its floats. If the floats are
successful, the company will profit even if it pays back the entire
amount it has received in premium.
Even when insurance companies pay out more money in claims that they
actually receive in premiums, as most companies do, they still make
profit by investing the money at a larger return than their cost of
float.
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