In insurance, risks that have no statistics for their calculations are
Answer Details
In insurance, risks that have no statistics for their calculations are considered as un-insurable risks. These risks are typically difficult or impossible to predict or quantify, making it difficult for insurance companies to assess the likelihood of the risk occurring and to determine the appropriate premium to charge. Examples of un-insurable risks include wars, nuclear accidents, and natural disasters such as earthquakes and floods.
Insurance companies are in the business of managing risk, and they use statistical analysis to assess the likelihood of a risk occurring and to determine the appropriate premium to charge. However, for risks that are difficult or impossible to predict, it becomes impossible for insurance companies to accurately calculate the premium that would be required to cover the potential losses.
Therefore, insurance companies typically do not offer coverage for un-insurable risks, or they may offer coverage at a very high premium that reflects the high level of uncertainty involved. In some cases, governments may step in to provide insurance coverage for un-insurable risks, such as through a national disaster insurance program.