What are the similarities and differences been property/casualty insurance companies and life insurance companies

Expert Solution

In terms of similarities both property/casualty insurance companies and life insurance companies have technically the same business model. The business model of both property/casualty insurance companies and life insurance companies are based around assuming of risk and diversifying the risk for its customers. Both these type of companies have the same essential insurance model that involves pooling risk from individual premium payers and then redistributing it across a larger portfolio.

In terms of differences while the property/casualty insurance companies’ aims at replacing the value of homes a life insurance company focuses on legacy planning and replacing human capital value. Property/casualty insurance companies insure against accidents of non-physical harm and this will include lawsuits, damage to personal assets etc. Life insurance companies mainly issue policies that pay a death benefit as a lump sum upon the death of the insured to their beneficiaries.

jeff jeffy answered 3 months ago

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