MANAGEMENT

Detailed explanation-1: -A risk that an insurer will not take on. For example, this may be where an event is inevitable (such as a terminally-ill person’s death), gradual (such as rust or corrosion) or against the law.

Detailed explanation-2: -In case of a scenario where the loss is too huge that no insurer would want to pay for it, the risk is said to be uninsurable. A risk may not be termed as insurable if it is immeasurable, very large, certain or not definable.

Detailed explanation-3: -If a river floods 800 times in a century, the flood is an insurable risk. However, the insurer can’t insure against a marriage failing. With so many factors, there’s no way an actuary could reasonably calculate a definitive probability of success or failure. That’s the essence of uninsurable risk.

Detailed explanation-4: -An uninsurable risk is a risk that insurance companies cannot insure (or are reluctant to insure) no matter how much you pay. Common uninsurable risks include: reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk.