Which category of insurance has nature of low frequency but high severity?

Answer 1

The category of insurance that typically exhibits low frequency but high severity is catastrophe insurance. This type of insurance covers large-scale events such as natural disasters (e.g., earthquakes, hurricanes, and floods) that occur infrequently but can result in significant financial losses when they do happen. Because these events are rare, they are less frequently claimed, but when they do occur, the resulting claims can be substantial.