You might find these magazines interesting. You want to start a company??!! are you an actuary?

Try to have as much information as you could perhaps is one of the options,however it is labor consuming,here is the place i have ever had good experience with.http://insurance.online-frees.info/insur...

insurance company take the premium and that money is invested in share market they provide home loan and they keep fixed deposit etc there are a lot of business work insurance company do

Risk and probabilities.

If you want to know how an insurance company works, then go work for an insurance company and discover these details for yourself. Starting an insurance company requires a huge (tens of millions) starting capital, so unless your last name is Buffet or Gates I doubt you'll be able to pull this capital from your bank account. This means you'll need investors. No one is going to invest in an insurance company where the CEO/CFO has no experience in the business except what they read in textbooks and information they garnered from Yahoo! Answers. Get out there and get some real world experience.

You want to start an insurance business, and you don't know how the company makes money? Sounds a bit backwards to me. Also, as mentioned, you might want to become an actuary first...

Each insurance company is mandated by the state insurance commission to have a certain $ amount in readily available cash, such as money markets, to pay out for claims. The $ amount will vary by the line of insurance, the number of policy holders, and the state but a cash reserve of $5 - $20 million is not uncommon. They will also have other long term, less liquid, investments. The insurance company then takes out re-insurance from other insurance companies to cover the remaining possible liabilities.

They make a profit mainly on their investments. Health insurance, for example, make less than 1% profit on the premium and many auto insurance companies pay out more in claims than they receive in premium.