Risk management in insurance businesses

One of the reasons that affect people's future behavior is uncertainty. Uncertainty refers to the tendency to make subjective predictions due to lack of information in making decisions about future events. However, uncertainty should not always be understood as an immeasurable concept. Because uncertainty can be measured by using the data of similar events that have occurred before and by applying mathematical and statistical methods. The measurable portion of uncertainty is called risk. Against the risks that may occur in uncertainty, people have to take various measures in order to protect their life and property. One of these measures is to have insurance. Insurance does not eliminate the risks that people face, it eliminates or reduces possible economic losses in case of realization of risks. Insurance companies undertake the risk in return for a certain premium they receive from the insured as a requirement of insurance transactions. In case of realization of the risk, they also compensate the damages that may arise. Based on the Law of Large Numbers, it can be calculated very close to the truth by making the risk clear by insuring a large number of units that face the same or similar risk. The fact that the probability of loss can be calculated very close to the truth also enables the insurance companies to calculate the insurance premium to be taken from the insured more fairly. This plays an important role in the survival of insurance businesses. However, the insurer cannot observe the continuation11 of the pile facing the risk. For this purpose, with the help of randomly selected examples from this heap, he can estimate the expected value of the loss distributions that will occur as a result of the realization of the risks. The difference between the expected value and the actual value after the event occurs is the standard error of the sample taken, that is, the measure of risk. The method of the study is the application of theoretical statistical techniques with the help of data. At the end of the study, it has been determined that the successful implementation of risk management in the insurance sector will strengthen the trust between the insurance companies in the sector and the insured and will ensure a more stable growth of the sector in the future.