Total Rewards Program - Case Study Example

g back to several millennia in ancient China and the fabled old city of Babylon under Hammurabi (1750 B.C.E.); a key concept of insurance as a form of protection against any financial losses has stayed the same all throughout from ancient times to modern times. Another vital concept in modern insurance is the use of statistical data and probabilities to determine insurance rates, using actuarial science. In this regard, it has become almost an entirely mechanical process, using powerful computers to determine the risk premiums suitable for an insurable risk, to be able to produce a profit.

The original use of insurance was to protect traders who transport their goods using the sometimes treacherous or dangerous river rapids in ancient China from a possible sinking of the boat carrying the goods. In the probability a boat had capsized, the indemnification a trader gets from the insurance will ensure he can rise again financially. In Babylon, the concept of insurance had a much different application. A sea merchant whose ship sinks in the Mediterranean Sea can expect to recoup his losses, because he had paid a premium on the loan to finance his expedition.

That extra premium will enable the lender to cancel the loan in case of a ship sinking. In todays capitalist, free-market environment, insurance coverage extends to many situations, such as life, car, boat, condominium unit, motorcycle, or anything of value, even the health of a person. Insurance is a financial product that needs to be sold aggressively, as opposed to other consumer products which people simply buy on their own initiative. Unless it is mandated, as in the case of the new health insurance coverage as required by law under the health reform act, it is a product that most people would rather do without, as premium payment is an added expense.

It is therefore important for an insurance firm to have a wide network of sales agents who will push its insurance policies, preferably exclusively with