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Insurance Principles Of Theoretical Perspective

Theoretically insurance relations and economic growth could be a causal relationship, but the same critical question is which one is more powerful as a major contributor? Economic growth favor the growth of insurance or insurance growth to support economic growth? The answer requires in-depth analysis, which combines the theoretical and empirical perspectives, taking into account a variety of phenomena and development trend of global conditions. Indonesia's position in the global environment in the "world of insurance" also needs to be a framework of thinking in analyzing the relationship between the growth of the insurance industry to the economic growth of a country, as well as predict the development of the insurance industry.

Theoretical point of view means discussing about insurance principles relating to the sources and uses of funds associated with the mobilization of public funds in the form of premiums and the management of these funds for investment purposes. The principle is further associated with the position of insurance as a financial institution in the mechanism of circular flow of income is a simple economic model which describes the interconnectedness between economic actors. The concept is in line with some of the results of studies and research that has been done in some other countries in Asia which shows that, the insurance industry became one of the pillars of economic growth.

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