This in turn increases the business (operation) risk of the insurance

company. Usually insurance companies try to concentrate on a higher number of policies of lower value for diversification benefits. Diversification serves to reduce the overall risk level of an insurance company. Rather than avoiding business arising from high value assets insurers follow the practice of underwriting high value assets partially. Thus a single insurer takes up a part of the total value of the asset and the asset is insured by a group of two or more insurance companies.