The insurance activity has the social function to minimise the negative impact of certain events (claims) that are out of the control of the insured such as fires accidents, sickness, theft, etc.
This is achived by sharing the high costs derived from them by a large number of financial institutions.
The statistics obtained from a large sample determine the probability of an event happening and serves to calculate the base premium for a given risk.
The derived compensation claims may be presented in monetary value or services such as repairs, hospitalizations, medical treatments, provided by specialised agencies.
Insurers need to know the costs of these services and establish protocols to guarantee the level of customer care, and thus settle the final cost of the cover package.