What is risk assessment in insurances?

Answer 1

Risk is the probability or chance of suffering a financial loss.

Stated otherwise, risk is the likelihood, or lack thereof, that an event will occur that will result in financial loss. It is the concept of risk upon which insurance is based. Specifically, in return for the payment of a premium, the insurer agrees to assume the risk, and therefore the financial impact, of the risk. The nature of the risk and the degree to and conditions upon which the insurer will assume the financial impact of the occurrence are set forth in the insurance policy.

Answer 2

An undesirable risk is rejected as such because the risk is to high. Basically it means that the company has reasonable certainty that a loss will occur even before you buy the policy.

A few examples of undesirable risk would be.

1. A teenage male with his first car and it happens to be a mustang. (almost a guarantee of an accident with the first 60 days).

2. A person with an extensive and rather regular claims history. (Indicative of fraud or negligent activity)

3. Someone with very bad credit looking to insure a high dollar risk. (potential for fraud activity)

AnswerIt is a risk that cannot be insured because of cercumstances, most of those risk are unpredictable e.g wars, roits, earthquakes.

Answer 3

In life insurance policy, the mortality of the person or the proposer is assessed by the underwriter what is called risk. Whereas in non life policy , the risk factor varies according to the character of the policy in question.

Answer 4

An insurance policy is a protection against a possible loss. Wet risk in insurance terms is anything from water damage.