what is the relationship between risk and insurance?
104121
Risk is the exposure to uncertainty.  An insurance policy is an exchange of a certain loss (the premium) to have another party (the insurer) absorb all or part of the negative consequence of being exposed to that uncertainty.\n\nFor example, you have virtually no risk of dying in an airplane crash if you do not get in an airplane.  You are not exposed, other than that a plane could fall on you.  Likewise, if you jump out of an airplane without a parachute, there is no risk.  You have all the exposure in the world, but it is certain that you will be killed.  There may be some trivial risk that you live but it is so small that it can be ignored.\n\nYou need two things, uncertainty and exposure.  Life insurance is a good example, you know for certain that you will die, you do not know when.  The insurer covers you against premature death.  Its reverse, the immediate annuity, covers you against living too long and running out of investment resources.
202737
reinsurance:\n1- An agreement whereby an insurance company transfers part or all of its risk of loss under insurance policies it writes by means of a separate contract or treaty with another insurance company. The insurance company providing the reinsurance protection is the Reinsuring Company or Reinsurer. The insurance company receiving the reinsurance protection is the Ceding Company. ...\nco-insurance:\n1-Many insurers require that homeowners insure their homes for at least 80 percent of REPLACEMENT COST. If the homeowner fails to do this, a penalty is applied to partial losses. This penalty is usually referred to as Co-insurance\n2-A contract which one insurer makes with another to protect the first insurer, wholly or partially, against loss or liability by reason of a risk under a separate and distinct contract as insurer of a third party. Reinsurance differs from coinsurance in that, in the case of reinsurance, only one insurer has a direct contractual relationship with the insured, and that insurer (commonly referred to as the "lead insurer") purchases reinsurance in order to lessen or increase\n2-An arrangement by which a number of insurance companies cover a particular risk.
481464
I think you mean reinsurance.  \n\nReinsurance is an agreement whereby an insurance company transfers part or all of its risk of loss under insurance policies it writes by means of a separate contract or treaty with another insurance company.  It is a contract between two insurance companies.\n\nBasically, the insurance company gets insurance itself to lower its overall risk.  \n\nFor instance, many insurance companies would've gone bankrupt covering the massive losses from many natural disasters if they themselves did not spread some of the risk by obtaining reinsurance policies.\n\nWarren Buffett has made lots of money in the reinsurance industry.  His company, Berskshire Hathaway, owns General Re, a reinsurance company.
615920
Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. Actuaries are professionals who are qualified in this field.\nI think it would be a profitable career to consider.
1011312
The principle that potential return rises with an increase in risk. Low levels of uncertainty (low risk) are associated with low potential returns, whereas high levels of uncertainty (high risk) are associated with high potential returns. In other words, the risk-return tradeoff says that invested money can render higher profits only if it is subject to the possibility of being lost.  \n\nBecause of the risk-return tradeoff, you must be aware of your personal risk tolerance when choosing investments for your portfolio. Taking on some risk is the price of achieving returns; therefore, if you want to make money, you can't cut out all risk. The goal instead is to find an appropriate balance - one that generates some profit, but still allows you to sleep at night.
111834
Underwriting determines who should be insured, classifies them according to risk, and determines rate structures.\n\nMarketing then convinces those people they should insure with the company.
614048
It's the line that shows the possible risk and returns.  As risk goes up, return goes up.  At the very left, with no risk, you're left with the risk-free rate.
550682
Oy that is a great question.  I take it you taking a risk managment or a derivative course! ;)  Basically you would have to put in functions (functions of interest and volatility variations) for both and then evaluate it accordingly.  It is nearly impossible to do by hand but computer can provide you with some good insight :).  That's when 3D probability that engineers love so much kicks in.  \n\nRival
251623
Ask a friend or neighbor you respect who they use.\nA deductible is the amount you must pay before insurance begins to pay.
331179
Because the person deemed to be needing the insurance will know the full facts about the subject matter they wish to insure.\n\nIf you think about it an insurance company are not in the position to know all the material facts about your car, house etc and will need those facts to accurately price the risk.\n\nIn the event of non-disclosure the insurance company may avoid the contract.\n\nHope all of this helps.
1177540
honestly you should never buy any type of insurance without sitting down with someone that way you have a much better chance of NOT getting screwed. good luck
234634
Liability coverages in general cover damages you cause to others.  There is Property Damages (to property such as cars, houses, personal items, etc) and Bodily Injury (injuries caused to a person).  The minimums vary from state-to-state, but almost all states require at least these two to be carried on a policy.
100788
DramaGuy is almost right.  A claim doesn't always increase the premium of the policy.  It depends on the type of claim and the company.
1185354
Perhaps it would help if you were to enlighten me.  I've never heard of "engineering insurance."  Do engineers need special insurance?
366262
Neither one is better than the other. Each product has their own characteristics. Every person in the market for insurance has their own individual needs. NEVER listen to anyone who tells you to only buy either one or the other. Most people will carry a mix of both. The best thing a person can do is consult with a financial professional and have a needs analysis done.
592597
It's actually D.  A isn't correct because we aren't given the covariance between the two securities.  The portfolio risk is not the simple weighted average of the individual risks. \n\nThe formula is\n\nsquare root of the sum of the weights multiplied with the covariances.\n\nIf the securities are negatively correlated, the total risk can be less than either of the individual securities.  If they're positively correlated, the portfolio risk goes up.
69876
Actuarial science applies mathematical and statistical methods to finance and insurance, particularly to the assessment of risk. Actuaries are professionals who are qualified in this field.\n\nActuarial science includes a number of interrelating disciplines, in particular the mathematics of probability and statistics.\n\nIn the life insurance industry, traditional actuarial science focuses on the analysis of mortality and the production of life tables, and the application of compound interest.\n\nIn the pension industry, actuarial science deals with methods of prefunding for retirement and proper measurement of liabilities that won't come due for many years. This is especially true with respect to the Old Age Survivors and Disability Insurance program in the United States and C/QPP in Canada.\n\nIn the property insurance field which protects against losses like those caused by hurricanes as well as automobile accidents, actuarial science tries to forecast losses to homes and cars.\n\nMore recently, actuarial science has come to embrace more sophisticated mathematical modelling of finance. Ideas from financial economics are also becoming increasingly influential in actuarial thinking.