NAME: ANAS ALI

ROLL NUMBER: 07
SUBMITTED TO: MA’AM SAUDA
INSURANCE

Insurance is defined as a contract, which is called a policy, in which an individual or organization receives
financial protection and reimbursement of damages from the insurer or the insurance company. Insurance is
contract between two parties (one the insurer and second the insured) whereby the insurer agrees to undertake
the risk of the insured in consideration of some amount known as premium and in return promises to
compensate a fixed sum of money to the insured party on happening of an uncertain event like DEATH.
Functions of an Insurance Company

1. Provides Reliability

The main function of insurance is that eliminates the uncertainty of an unexpected and sudden financial loss. This
is one of the biggest worries of a business. Instead of this uncertainty, it provides the certainty of regular payment
i.e. the premium to be paid.

2. Risk Free Trade:

Insurance promotes export insurance, which makes the foreign trade risk free with the help of different types of
polices under marine insurance cover.

3. Pooling of Risk

In insurance, all the policyholders pool their risks together. They all pay their premiums and if one of them suffers
financial losses, then the payout comes from this fund. So the risk is shared between all of them.

4. Legal Requirements

In a lot of cases getting some form of insurance is actually required by the law of the land. Like for example when
goods are in freight, or when you open a public space getting fire insurance may be a mandatory requirement. So
an insurance company will help us fulfil these requirements.

5. Capital Formation

The pooled premiums of the policyholders help create a capital for the insurance company. This capital can then
be invested in productive purposes that generate income for the company.
 INVESTMENT BANKS

Investment banking is the division of a bank or financial institution that serves governments, corporations, and
institutions by providing underwriting (capital raising) and mergers and acquisitions (M&A) advisory services.
Investment banks act as intermediaries between investors (who have money to invest) and corporations (who
require capital to grow and run their businesses). This guide will cover what investment banking is and what
bankers actually do.

Functions of an investment banks

1. IPOs:

Investment Banks facilitate public and Private Corporation’s Initial Public Offering known as IPO (issuing
securities in the primary market) by providing underwriting services. Other services include acting as
intermediate in trading for clients and foreign exchange management.

2. Investment management:

Investment Bankers also provide advice to investors to purchase, manage and trade various securities (shares,
bond, etc.) and other assets like real estate, hedge fund, mutual funds etc. Investors may be financial institutions
or big fund houses or private investors. The investment management division of an investment bank is divided
into groups, namely, Private Wealth Management and private Client Services.

3. Merger and Acquisitions:

Another major function of the investment banking includes mergers and acquisitions (M&A) and corporate
finance which involve subscribing investors to a security issuance, coordinating with bidders, or negotiating
with a merger target.

4. Research:

Research is another important function of an investment bank which reviews companies and writes reports
about their prospects with “buy” or “sell” ratings. Though this division does not generate direct revenue, the
information gathered or produced by them is used to guide Investors and in some cases for Mergers and
Acquisitions.

5. Risk Management:

It is a continuously ongoing activity which involves analyzing the market and credit risk that traders are taking
onto the balance sheet in conducting their daily trades, setting limits on the amount of capital that they are able
to trade in order to prevent ‘bad’ trades having a detrimental effect to a desk overall.