In insurance terminology, what does the term "insurer" signify?

The term "insurer" refers to the entity that provides insurance coverage, which is typically a company or organization that assumes the risk associated with the insurance policy. The insurer is responsible for underwriting the insurance product, collecting premiums from policyholders, and paying out claims in accordance with the terms of the policy. This definition is central to understanding the structure of insurance agreements, as it establishes who bears the financial risk and provides the coverage in the event of a loss.

In contrast, the individual who purchases the insurance policy is referred to as the "insured" or the "policyholder," emphasizing the distinction between those who seek insurance protection and those who offer it. An external auditor's role pertains to financial oversight and compliance, rather than the direct provision of insurance. Meanwhile, a representative managing claims operates under the insurer's umbrella but is not the entity itself; rather, they facilitate the claims process for customers. Understanding these roles is crucial for grasping how insurance systems function, particularly in personal lines insurance.