Role of Xtensible Business Reporting Language (XBRL) in Insurance Sector

An insurance contract provides risk coverage to the insure. A purchaser of insurance pays a fixed premium in exchange for a promise of compensation in the event of some specified loss. Insurance is bought because it gives peace of mind to the holders. The comfort level is important in personal and business life. Those primary purposes of insurance is to provide risk coverage, when the contract period extends over along time, as in the case of life insurance, premium payments comprise of two components-one for buying risk coverage and the other towards savings. This bundling together of risk coverage and savings is peculiar to life insurance and its more common in developing countries like India. In the industrially advanced countries, this is not necessarily so and short duration life insurance contracts without savings components are equally popular. In the developing economies, because of the savings component and the long nature of the contract, life insurance has become an important instrument of mobilizing long-term funds. The savings component puts the life insurance in institutions and savings instruments. Insurance in any company is regarded asa pillar of growth and it works as a catalyst in the overall development of the economy. The industry always remains a source of long-term funds, which are vital for the development of the basic and capital market and also vitalizes the market for government bonds. Well run insurance companies are of the best recyclers of a country's money in the interest of the countries’ overall development, particularly because these companies match their liabilities with local assets. Insurance is, basically defined as a financial agreement that redistributes the cost of unexpected losses. Today, it stands both as a service and industry in its own right.