What is the main purpose of ancillary products in the insurance industry?

The main purpose of ancillary products in the insurance industry is to help prevent losses. Ancillary products are designed to complement primary insurance coverage and often include services that enhance risk management. By providing additional support, these products can mitigate the likelihood of claims or losses occurring in the first place.

For instance, ancillary products might include risk management services, safety programs, or wellness initiatives that target specific risks faced by policyholders. By focusing on loss prevention, these products ultimately contribute to a more stable insurance environment and can benefit both insurers and insured by reducing the overall frequency and severity of claims.

While options regarding financial compensation, premium reduction, or increasing policy limits are relevant to various aspects of insurance, they do not capture the fundamental role of ancillary products, which is centered on proactive measures to reduce risk and prevent losses.