When we talk about insurance we indicate risks in all types. Having a collateral policy is just a way to share our risks with other people with similar risks.
While some risks are guaranteed (ie, secure risk), some can not be guaranteed by nature (ie, unsafe risk).
Insufficient risk is a type of risk that the insurer expects or hedges because it is possible to collect, calculate and estimate future losses. The insured risk has previous figures that are used to assess the premium. It gives out the prospect of loss but not profit. The risk can be forecast and measured, for example, motor insurance, marine insurance, life insurance, etc.
This type of risk is the one that can reduce the likelihood that an event exists, from available information on the frequency of a similar event. Example of what the risk is guaranteed as described:
Example 1: The probability (or likelihood) of a particular vehicle will be involved in an accident in 2011 (of the total number of the insured vehicle that year 2011) can be determine the number of vehicles involved in accidents each summer in recent years (of the total number of insured vehicles).
Example2: The probability (or probability) of a certain age (or woman) of a certain age will die next year can be estimated by a fraction of people at the age of each previous year .
Unprotected risks are the type of risk that the insurer is not prepared to secure against simply because it is not possible to estimate and probably calculate future losses. It has the potential to get as well as it loses. The risk can not be predicted and assessed.
Example 1: The probability that product demand will be next year due to consumer changes & # 39; Taste will be difficult to assess since previous statistics may be unavailable.
Example 2: The probability that the current production method will be obsolete or obsolete next year due to technological progress.
Other examples of insignificant risk are:
1. The Acts of God: All risks involving natural disasters called God's acts, such as
It should be noted that construction, property or life insurance can not be added but lost during the activities of God (above). This insecurity is also extended to those related to radioactive contamination.
2. Gambling: You can not guarantee the odds of losing gambling.
3. Loss of Profit with Competition: You can not guarantee your ability to win or lose a race.
4. Launch of new product: A new product launcher can not guarantee the possibility of new product approval because it has not been market tested.
5. Damage caused by bad / inefficient management: The ability to manage organizational structure is based on many factors, and the profit / loss depends on the judicial utilization of these factors, which is an effective management capability. Expected loss of institution is expected due to inefficiency.
6. Bad Placement of Business: Anyone who puts a business in a poor place must know that their chances of success are slim. Ensuring such a business is a safe way of dealing with the insurer.
7. Loss of profit due to drop in demand: Demand for product varies by time and other factors. The insurer will never guarantee on the basis of future losses due to falling demand.
8. Speculative Training: This is a participation in a venture that offers the potential for high profits than the possibility of loss. A typical example is the operation or execution of investments in equities, assets, etc. In expectation of profits from an increase or decrease in market value but with the possibility of loss. This can not be insured because it is considered an unprotected risk.
9. Opening of a new store / office: Opening of new stores is considered an insecure risk. You do not know what to expect in the operation of the new booths; It is bad that the insurer agrees to secure a new shop for you.
10. Change of fashion: Fashion is a trend that can not be predicted. You can not insure all expectations in fashion. Fashion houses can not be guaranteed because part of the fashion house can be outdated anytime.
11. Motoring offsets: You can not get an insurance policy against expected fines due to unregistered compliance while on wheels.
However, it should be borne in mind that there is no clear distinction between safe and unpredictable risks. In theory, an insurance company should be prepared to secure anything if a sufficiently high premium would be paid. Nevertheless, the distinction is useful for practical purposes.
Source by David Mog