by Mike Tejada

Created on: July 10, 2008

Insurance Companies feel that risk is a two headed coin. Insurance companies are in the business of making money, and everything that would hinder that is a loss. Most insurance companies have a liability, asset mix. Most insurance companies look consider taking risk very heavily because they feel that adding liabilty would hurt them in the future. The Long term liabilities are something that would decline their balance sheets. Taking risks in the long term would without having the ability to leave the contract is something that companies avoid like the plague. In hard times when revenues are hard to find when losses are magnified. Most profits are reserved for a time when the profits seem to be bleek or even decreasing. One example of this is GM. GM has retained earnings throughout 2011 even though when their business models are in the decline. High gas prices is causing that business model to decline rapidly. Most people are not willing to invest alot of money into a product that will decline in the long run. The long term effects of the change of the business model can be a decline in the decrease of the dollar. The weak dollar can be advantageous for other countries because because they could purchase more. Insurance companies are hurt by the decline of the dollar because their future earings are already programmed into the balance sheet. Only by having a flexible business model can insurance companies survive into the twenty first century. Most Insurance companies understand that revenues are as set in as payroll. Liability is a word that scares off most insurance companies that is the reason why Warren Buffet is shying away in both in the united states and in china. China is a place where risk is rampid therefore companies that take risk in stride. in a doctor's point of view, most doctors do not like taking risk because their malpractice insurance will shoot through the roof. Health insurance is the only business that is flourishing because of the high co pays that patients have to pay. Health care in a government level it is out of the reach of many citizens because procedures are becoming more expensive and many are not able to deal with the rising cost of healthcare. Even though doctors are greatly conpensated they also feel the brunt of paying high insurance liability. Insurance companies reflect the fear that doctors also feel when inquiring about health insurance.

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