Insurance is the sharing of {{U}}(1) {{/U}}. Nearly everyone is exposed {{U}}(2) {{/U}} risk of some sort. The house owner, for example, knows that his {{U}}(3) {{/U}} can be damaged by fire; the ship owner knows that his vessel may be lost at sea; the breadwinner knows that he may die by {{U}}(4) {{/U}} and {{U}}(5) {{/U}} his family in poverty. On the other hand, not every house is damaged by fire or every vessel lost at sea. If these persons each put a {{U}}(6) {{/U}} stun of money into a pool, there will be enough to {{U}}(7) {{/U}} the needs of the few who do suffer {{U}}(8) {{/U}}. In other words the losses of the few are met from the contributions of the {{U}}(9) {{/U}}. This is the basis of {{U}}(10) {{/U}}. Those who pay the contributions are known as {{U}}(11) {{/U}} and those who administer the pool of the contributions as insurer.
The {{U}}(12) {{/U}} for an insurance naturally depends on how the risk is to happen as suggested {{U}}(13) {{/U}} past experience. If the companies fix their premiums too {{U}}(14) {{/U}}, there will be more competition in their branch of insurance and they may lose {{U}}(15) {{/U}}. On the other hand, if they make the premiums too low, they will not have {{U}}(16) {{/U}} and may even have to drop out {{U}}(17) {{/U}} business. So the ordinary forces of supply and {{U}}(18) {{/U}} keep premiums at a proper {{U}}(19) {{/U}} to both insurers and those who {{U}}(20) {{/U}} insurance.