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Meaning, types of risk and how many risks are covered by insurance companies
meaning, types of risk and how many risks are covered by insurance companies
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Rucha rajesh shingvekar
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Meaning of Risk: In simple words risk is danger, peril, hazard, chance of loss, amount covered by insurance, person or object insured. The risk is an event or happening which is not planned but eventually happens with financial consequences resulting in loss. There is saying higher the risk more the profit. A risky proposal can on one hand bring higher profits but on the other hand looming losses. The risk can never be certain or predictable. Therefore there is need for the risk management.
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please explain these all risks in detail
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Rucha rajesh shingvekar![best-answer]()
Pure risk is a category of risk that cannot be controlled and has two outcomes: complete loss or no loss at all. There are no opportunities for gain or profit when pure risk is involved. Pure risk is generally prevalent in situations such as natural disasters, fires, or death. Speculative risk has a chance of loss, profit, or a possibility that nothing happens. Gambling and investments are the most typical examples of speculative risk. The traditional insurance market does not consider speculative risks to be insurable. Financial risk is the possibility of losing money on an invest-ment or business venture. ... Financial risk is a type of danger that can result in the loss of capital to interested parties. For governments, this can mean they are unable to control monetary policy and default on bonds or other debt issues. Non-financial risks (NFR) are all of the risks which are not covered by traditional financial risk management Particular risk is the possibility of loss which can arise from a situation related with any specific individual events: such as unemployment, robbery or theft. E.g. any losses arising out of robbery or theft will directly affect an individual. Definition of Fundamental Risk Exposure to loss from a situation affecting a large group of people or firms, and caused by (a) natural phenomenon such as earthquake, flood, hurricane, or (b) social phenomenon, such as inflation, unemployment, war. Fundamental risks may or may not be insurable. Static risks are risks that involve losses brought about by acts of nature or by malicious and criminal acts by another person. These losses refer to damages or loss to property or entity that is not caused by the economy. In these cases, there is a financial loss to the insured party. A Dynamic risk is a risk brought on by sudden and unpredictable changes in the economy. As an example, this can occur through changes in pricing, income, brand preference or technology. These changes can bring about sudden personal and business financial losses to those affected.