Insurance Companies vs. Banks: Understanding the Difference – by Jose Miguel Artiles Caballos
Banks and Insurance Companies, both are considered as a type of financial intermediaries. However, even though they have a few similarities, they don’t have as much in common as one might think. The operations in both of these financial intermediaries are based on different models that create some notable differences between them. In this article, Jose Miguel Artiles Caballos, the director of Bandania Formula Capital LTD , explains the key differences between the two financial intermediaries, i.e. banks and insurance companies. To understand the differences between them, it is important to understand them individually. Now, we know that banks and insurance companies are both financial intermediaries, but their model of operation is different. Insurance Companies : An insurance company makes sure that its customers don’t face certain risks, such as the risk of having a car accident, or the risk of the house catching fire. In return for this risk insurance, the customers pay them regul