General insurance Pure and speculative Risk

[Mataracy]

In this contexts we are going to look at this particular risk and how to manage them.
To have a situation that involves a loss we could imagine to two combinations of situations.

The first form of situation holding out the prospect of a loss could be where either a loss or a break- even position may materialize. Driving a motor car represents an example of this. Every time you take your car on the road you run a risk; there is the uncertainty of loss.
You may damage your car or other property or incur a liability in view of injury sustained by someone.

A pure holds out the prospect of a loss or no loss while a space speculative risk holds out the prospect of gain as well as loss or break-even.

In the business world speculative risks are very common. Exporting to a new market, launching a new product and fixing retail prices are all forms of speculative risk as they hold our prospect of loss, breakeven or profit. Pure risks are equally common.
The factory may be burnt down, profit may be lost following a fire incident, money may be stollen..
These situations hold out the prospect of loss but at the sane time they may not occur and the result will be the statuesque.

 

[Wisdom01]

I think everything is still on probability , because most times after predicting that the risk would actually occur and it didn't occur , there is actually not anything close to speculative risk because you can't predict but only assume the risk would happen that's why you buy insurance premium for company

 

[btaliat]

Nice write up. There are truly some risks that may have low probability of happening. That's why we have some risks that we cannot insure. Among the risks that we can not insure are gambling. No insurance company will also try to go into some risks that are not measurable.

 

[Mataracy]

Nice write up. There are truly some risks that may have low probability of happening. That's why we have some risks that we cannot insure. Among the risks that we can not insure are gambling. No insurance company will also try to go into some risks that are not measurable.

Yes you are very correct bro. In fact any insurance company that wanted to succeed in there dealings will never try to accepts any contract from gambling because the risk is to night . And a good insurance company will always measure the risk they are about to take if it will be benefits to them or not before they take or accept the offer .

 

[btaliat]

I think everything is still on probability , because most times after predicting that the risk would actually occur and it didn't occur , there is actually not anything close to speculative risk because you can't predict but only assume the risk would happen that's why you buy insurance premium for company

There may be speculation on whether risk may happen. This at times depend on the insurance policy one may opt to go for. Most time, one needs to consider the type of business that one involves in before one can go for insurance. It is not possible for accident not to happen especially in marine insurance. Even there is slim tendency that there won't be sickness, hereby making health insurance essential.

 

[Mandy96]

Everything is a risk in life, this is why i consider insurance important and it is something everyone should do or get involved in.to me, The world “insurance” itself simply means “assurance”. But I think in business sense it doesn’t really mean what I consider it to mean because as much as you benefit from it, the insurance company also make some benefit from it.

 

[Wisdom01]

Everything is a risk in life, this is why i consider insurance important and it is something everyone should do or get involved in.to me, The world “insurance” itself simply means “assurance”. But I think in business sense it doesn’t really mean what I consider it to mean because as much as you benefit from it, the insurance company also make some benefit from it.

Insurance is more about risk too , and is based more on probability , because we don't know if such risk might likely occur or might not occur it's of two ways , and the person involved might only benefit if the risk the person insure against actually occured , so insurance is mostly concerned about risk and the insurer needs to know about that

 

[Richee84]

It is very important for every entrepreneur to know have knowledge about risk management. Pure risk are risk that are bound to happen and affect the company's negatively while speculative risk are risk that might bring out positive impact on the business. All business owner must prepare for risk and learn how to control the risk.