Understanding the Financial Sector: Insurance Companies

This is a follow-up to "Understanding the Financial Sector: Banks."

Many do not understand insurance companies and even more do not appreciate their benefits until forced to buy insurance or perhaps when they experience a loss and it is too late. (Consider the people who suffered great personal losses in the wake of natural disasters like Hurricane Katrina or man-made disasters like those on September 11, 2001.)

Due to the complexity and varied product lines within the insurance business, I find insurance companies to be less understood than other financial service companies. So this installment of The Finance Professor will now take a look at this industry group.

How Insurance Companies Make Money ...