In the context of insurance, what is an insurer?

An insurer is defined as a company that provides insurance coverage. This entity takes on the risk of potential losses from policyholders in exchange for premiums paid. Insurers design various types of insurance products to meet the needs of individuals and businesses, offering protection against financial loss. By pooling the risks of many policyholders, insurers can spread the financial burden of claims when they occur, providing a safety net for those insured.

In the context of the other choices, a policyholder refers to an individual or entity that has purchased an insurance policy and is covered under its terms. An agent is someone who sells insurance products on behalf of the insurer, assisting clients in choosing appropriate coverage. A government program providing coverage generally refers to publicly funded health or social insurance programs, which are distinct from private insurers but still aim to mitigate financial risk for the populations they serve. Understanding the roles of these different entities highlights the primary function of the insurer as the provider of risk management through coverage.