MANAGEMENT

Detailed explanation-1: -Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee-an insurance premium-to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.

Detailed explanation-2: -Catastrophe insurance protects businesses and residences against natural disasters such as earthquakes, floods, and hurricanes, and against human-made disasters such as a riot or terrorist attack. These low-probability, high-cost events are generally excluded from standard homeowners insurance policies.

Detailed explanation-3: -1Catastrophic risk is one where a large number of people are exposed to the risk of a large loss by reason of the occurrence of a peril. It could be a natural calamity in the form of earthquakes, floods, draughts or even terrorism attack resulting in loss of life, destruction of infrastructure on a large scale.

Detailed explanation-4: -The period between the catastrophic event and the completion of repairs allows insurers time to fund the loss through underwriting cash flow, normal cash flow from investments, asset liquidation, debt financing, or advance funding from reinsurers.

Detailed explanation-5: -Catastrophe risk is the risk of many policyholders dying or falling sick due to a sudden event, such as a pandemic. The effects of a catastrophe shock are felt more immediately than the effects resulting from a mortality shock.