- Деловая деятельность сопряжена с появлением рисков.

- Существует ряд страхуемых рисков, и владелец бизнеса может застраховаться от них.

- Предприниматель должен хорошо ориентироваться в вопросах, связанных со страхованием.

- Страховой полис – это контракт между компанией и страхуемым лицом.

- В страховом полисе четко представлен объект страхования, оговорены условия страхования, сумма страхования и другое.

- Страхование, представляемое бизнесу, может быть следующих видов: страхование ответственности, страхование собственности, страхование на случай прекращения деятельности, страхование ценных бумаг, страхование деловой деятельности и особые случаи страхования.

- Страховой агент – независимое лицо, осуществляющее страховую деятельность от имени конкретной страховой фирмы.

- Большинство владельцев малого бизнеса не имеют достаточных средств на случай возникновения чрезвычайных ситуаций в бизнесе, но если бизнес застрахован, то владелец предприятия имеет возможность продолжить свою деятельность.

Principles of insurance

Commercially insurable risks typically share seven common characteristics.

1. A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, proportionally the actual results are increasingly likely to become close to expected proportions. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.

2. Definite Loss. The event that gives rise to the loss that is subject to the insured, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

3. Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.

4. Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.

5. Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.

6. Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.

7. Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent.

Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurer's appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon.

In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Exercises

1. Answer the questions based on the text.

1. What kinds of losses are stated in the text?

2. How many automobiles did insurance cover in the United States in 2004?

3. What examples of a definite loss do you know?

4. What types of losses may only be definite in theory?

5. Are the events that contain speculative elements generally not considered insurable?

6. What are the two elements that must be estimable?

7. Is it possible to make a reasonably definite and objective evaluation of the amount of the loss?

8. In what case will the capital constraint restrict an insurer's appetite for additional policyholders?

9. Can you give the examples of insurance where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten?

10. Do the insurance firms offer all types of insurance or do they offer insurance for some definite risks?

2. Find the equivalents

обычный	aggregation
компенсируемый	phenomenon
несмотря на	affect
держатель полиса	probability
явление	coast
напряженность	earthquake
совокупность	protection
возможность	recoverable
действие	hurricane zones
ураганные зоны	constraint
защита	ordinary
землетрясение	despite
побережье	policyholder

7. Make up sentences with the following word-combinations

- to be infrequent

- to be insurable

- ordinary business risks

- sufficient information

- to have a real value

- probability of loss

- essential risk

4.Translate the following sentences into English

- Существуют разные виды страховых полисов. В современном деловом мире страхование охватывает многие аспекты жизнедеятельности.

- В случае определенного ущерба, время, место и причины наступления данного ущерба должны быть четко прописаны и ясны.

- Случаи, произошедшие в результате проведения каких-либо спекулятивных действий, например, обычные коммерческие риски, не являются случайными потерями и не могут быть застрахованы.

- В случае с крупными убытками сумма страховых выплат должна покрывать ожидаемую стоимость убытка, а также стоимость оформления полиса и урегулирования убытка.

- Если вероятность наступления страхового случая велика или стоимость убытка очень высока и итоговые выплаты не покрывают стоимость убытка, то вряд ли кто-либо решится приобрести такое страхование.

- В случае исчисляемого убытка, по крайней мере, два обстоятельства должны быть оценены: возможность убытка и полагающиеся выплаты.

- Страхование рисков, предполагающих крупные убытки (как, предположим, в случае с ураганом или землетрясением), осуществляется группой страховых компаний.

Competition

Competition is a contest between individuals, groups, nations, animals, etc. for territory, a niche, or a location of resources. It arises whenever two or more parties strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For example, animals compete over water supplies, food, and mates, etc. Humans compete for water, food, and mates, though when these needs are met deep rivalries often arise over the pursuit of wealth, prestige, and fame. Business is often associated with competition as most companies are in competition with at least one other firm over the same group of customers.

Competition may give incentives for self-improvement. For example, if two watchmakers are competing for business, they will hopefully improve their products and service to increase sales. If one watchmaker is more responsive to the needs of consumers, this watchmaker will flourish. If birds compete for a limited water supply during a drought, the more suited birds will survive to reproduce and improve the population.

Rivals (similarly matched competitors well known to each other) will often refer to their competitors as "the competition". This is especially true of archrivals (primary, longstanding rivals, often the best in their segment). The term "competition" can also be used to refer to the contest or tournament itself.

Competition may also exist at different sizes; some competitions may be between two members of a species, while other competitions can involve entire species. In an example in economics, a competition between two small stores would be considered small compared to competition between several mega-giants. As a result, the consequences of the competition would also vary- the larger the competition, the larger the effect.

In addition, the level of competition can also vary. At some levels, competition can be informal; more for pride and/or fun. However, other competitions can be extremely serious; for example, some human wars have erupted because of the intense competition between two nations.

Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms". It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses and encouraging efficiency. Later microeconomics theory distinguished between perfect competition and imperfect competition, concluding that no system of resource allocation is more efficient than perfect competition. Competition, according to the theory, causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products. The greater selection typically causes lower prices for the products, compared to what the price would be if there was no competition (monopoly) or little competition (oligopoly).

However, competition may also lead to wasted (duplicated) effort and to increased costs (and prices) in some circumstances. For example, the intense competition for the small number of top jobs in music and movie acting leads many aspiring musicians and actors to make substantial investments in training which are not recouped, because only a fraction become successful.

Three levels of economic competition have been classified:

1. The most narrow form is direct competition (also called category competition or brand competition), where products which perform the same function compete against each other.

2. The next form is substitute or indirect competition, where products which are close substitutes for one another compete. For example, butter competes with margarine, mayonnaise and other various sauces and spreads.

3. The broadest form of competition is typically called budget competition. Included in this category is anything on which the consumer might want to spend their available money. For example, a family which has $20,000 available may choose to spend it on many different items, which can all be seen as competing with each other for the family's expenditure.

Competition does not necessarily have to be between companies. For example, business writers sometimes refer to internal competition. This is competition within companies.

Finally, most businesses also encourage competition between individual employees. An example of this is a contest between sales representatives. The sales representative with the highest sales (or the best improvement in sales) over a period of time would gain benefits from the employer.

It should also be noted that business and economic competition in most countries is often limited or restricted. Competition often is subject to legal restrictions. For example, competition may be legally prohibited, as in the case with a government monopoly or a government-granted monopoly. Tariffs, subsidies or other protectionist measures may also be instituted by government in order to prevent or reduce competition. Depending on the respective economic policy, pure competition is to a greater or lesser extent regulated by competition policy and competition law.

Competition between countries is quite subtle to detect, but is quite evident in the World economy. Countries compete to provide the best possible business environment for multinational corporations. Such competition is evident by the policies undertaken by these countries to educate the future workforce.

Competition law, known in the United States as antitrust law, has three main functions. Firstly, it prohibits agreements aimed to restrict free trading between business entities and their customers. For example, a cartel of sports shops who together fix football jersey prices higher than normal is illegal. Secondly, competition law can ban the existence or abusive behaviour of a firm dominating the market. One case in point could be a software company who through its monopoly on computer platforms makes consumers use its media player. Thirdly, to preserve competitive markets, the law supervises the mergers and acquisitions of very large corporations. Competition authorities could for instance require that a large packaging company give plastic bottle licenses to competitors before taking over a major PET producer. In this case (as in all three), competition law aims to protect the welfare of consumers by ensuring business must compete for its share of the market economy.

In recent decades, competition law has also been sold as good medicine to provide better public services, traditionally funded by tax payers and administered by democratically accountable governments. Hence competition law is closely connected with the law on deregulation of access to markets, providing state aids and subsidies, the privatisation of state-owned assets and the use of independent sector regulators, such as the United Kingdom telecommunications watchdog Ofcom. Behind the practice lies the theory, which over the last fifty years has been dominated by neo-classical economics.

Exercises

1. Answer the questions based on the text.

1. When does competition arise?

2. What is competition?

3. Why does competition occur naturally between living organisms which co-exist in the same environment?

4. What examples of competition do you know?

5. Is a competition between two small stores considered small?

6. How does Merriam-Webster define competition in business?

7. Was competition described by Adam Smith in The Wealth of Nations?

8. Do you know the difference between perfect competition and imperfect competition?

9. Competition causes commercial firms to develop new products, services and technologies, doesn`t it?

10. In what situations may competition lead to wasted effort and to increased costs?

11. How is the broadest form of competition typically called?

12. Can competition be legally prohibited by government?

13. What is a competition law aimed at?

14. Does competition necessarily have to be between companies?

15. Would you agree that competition is an impulse for development?

2. Find the equivalents

очевидный	independent
значительный	to restrict
независимый	evident
антимонопольный закон	to detect
лицензия	existence
возмещать	illegal
обнаруживать	license
внутренний	to prevent
незаконный	acquisition
приобретение	internal
существование	to recoup
предотвращать	substantial
ограничивать	antitrust law

3.Make up sentences with the following word-combinations

- competition law

- to a greater or lesser extent

- to be subject to

- to be legally prohibited

- to be closely connected with

- to secure the business

- to be responsive to the needs of consumers

- to compete for business

- to increase sales

- to flourish

4.Translate the following sentences into English