What is Risk Assessment and What are the Benefits There of?

Recently Malaysia was in news for introduction of phased liberalisation. Phased liberalisation has changed the face of insurance sector in Malaysia. It is expected to bring benefits for both insurance companies and consumers. Insurance companies can now calculate the premium on the basis of risk assessment as compared to fixed tariff method which was used earlier. With insurance news about phased liberalisation, consumers are expecting a lot of reforms for themselves. Here’s a look at what risk assessment is and how it is beneficial for the consumers:

About Risk Assessment

The insurance risk assessment is an evaluation of the various types of risks faced by the insurance company. It includes various factors which can affect an individual or business. The factors depends on what you are getting insured. You may be familiar with some risks but may not be acquainted with all of them. Thus, the risk assessment is performed by the qualified individual who is aware of the nuances of the business. The main objective of risk assessment is to calculate the amount of premium that is to be paid by the individual on the insurance policy.

Here’s a look at how consumers can benefit from risk assessment:

• One of the first benefits of risk assessment is that once you get to identify the risks, you can follow preventive steps to mitigate them. With risk assessment you will get to know what you didn’t know before.
• Another benefit of insurance risk assessment is that you can save money on the insurance premiums. The insurance companies are doing nothing but placing a price on each type of risk. If you are able to reduce your exposure to each type of risk, you can benefit from paying lesser premium. The reward for lesser risk profile is lower premium.
• Having a lower risk profile not only helps in lowering the rate of premium but also helps in establishing a good will. If you have a good track record, it will help in having a good claim history so that you can always benefit from paying lower premiums on insurance policies.
• The final benefit of risk assessment based insurance premium is that it makes you responsible. If you are aware of the fact that risk assessment will consider your claim record, you will engage in more responsible driving behavior.

However, you can’t do anything about few factors of risk assessment such as age and gender which are considered when calculating the premium of your policy.

Explore the web for more information on insurance news in Malaysia to remain updated on the latest happening in the insurance sector. Author Bio: Mark Jepson is an automobile marketing professional and he is known for publishing articles about car, life and motor insurance news in Malaysia. He offers honest advice regarding auto insurance and car insurance policies through his blogs. Connect with him to get most astonishing motor insurance plans at affordable costs and understanding various features of insurance risk assessment. His blogs also share details about latest insurance news in Malaysia which can help you in choosing the best motor insurance plans.

Peter is a technical writer and insurance customer service officer. He writes for online blogging sites mainly related to auto insurance and car insurance.