The document discusses the meaning and characteristics of insurance. It outlines some key points: 1. Insurance involves pooling losses from many individuals so average losses can be substituted for actual losses of a few. It provides payment for unexpected, accidental losses. 2. Risk is transferred from the insured to the insurer, who is in a stronger position to pay losses. Indemnification means restoring the insured to their pre-loss position. 3. For a risk to be insurable, losses must be measurable, large numbers must be exposed, losses cannot be catastrophic, and the chance of loss must be calculable so premiums can be affordable.

1. Insurance and Risk 2nd Session