1.2. Insurance risk
1.2.1. The concept of risk
Risk is the attribute of insurance and its basis. The term risk comes from the Greek word & r; rixikon - the cliff, respectively, risk originally meant "maneuvering between rocks". Risk is a fundamental property of a person's vital activity, the understanding of which people expand and deepen together with the development of scientific knowledge.
Risk is a complex concept, firstly, due to the diversity of spheres of origin (one can talk about economic, political, moral, technical, environmental and other risks); secondly, because, having manifested itself in one sphere of activity (technical), it has consequences in other spheres and branches of activity (in economy, ecology). Complexity, multidimensionality of risk caused its study by different sciences (statistics, economics, law, engineering sciences, management, psychology, etc.), each of which has its own approaches to the definition and assessment of risk. This explains the presence in the literature of a large number of various definitions of the concept of "risk" and the values that the term is endowed with.
In SI Ozhegov's dictionary, risk is defined as a possible danger and as an action at random in the hope of a happy outcome. In the broad sense of the word, risk is understood as the danger, and the chance, that occur in the conditions of uncertain future.
In the specialized literature and practical activities, the concept of risk may be endowed with a concrete meaning, in particular: it is the probability of an adverse event (incident) occurring; the possibility of loss (in the yes & quot ;, no ) estimate; probability of loss (in quantitative change); uncertainty of losses; unpredictability; the likelihood of a difference in actual results from those expected; the property itself, which can suffer; a combination of hazards that an object may suffer from; a list of events in which the insurer is obliged to make payments; and so on
In the process of the subject's activity, in the conditions of uncertainty, deviations from the desired state arise in both favorable and unfavorable directions. Deviation in the unfavorable direction is defined as a risk in the narrow sense of the word. Negative deviation from the desired state has a specific economic expression - a probable loss caused by accidental adverse events.
The risk can be identified or unidentified. With the development of society, more and more risks become identified (identified). Manage (including through insurance protection) can only be identified risk, but not every identified risk is the basis for the organization of insurance protection.
The extraordinary variety of types of risks leaves no doubt about the need for their classification. There are many ways to group risks. Suffice it to say that every science that studies risk proposes its own classification.
The economy mainly uses six basic classification features:
- according to the source of risk: natural factors, economic activity and personal quality
- because of the occurrence: lack of information; unpredictability of behavior of subjects; uncertain future;
- in the sphere of origin: external and internal;
- if possible, manage: manageable and unmanaged;
- in the sphere of manifestation: macroeconomic and microeconomic;
- by industry: industrial; trading; transport; banking, etc.
Other classifications are also possible. For example, technical, fire, construction, transport, investment, credit, etc. risks are known; household risks; domestic and international; static and dynamic; quantitative and qualitative and many other risks. The multiplicity of classifications is explained by the fact that the very concept of "risk" is ambiguous and each risk can be classified according to a number of characteristics.
Due to the particular urgency, environmental risks associated with human environmental pollution, as well as political risks caused by actions, actions or actions of foreign governments that are illegal from the point of view of international law, have been actively investigated recently.
Risk in the narrow sense of the word can be defined as the greatest possible damage that can be caused to an object by a random adverse event. To characterize the magnitude of the risk, such concepts as insignificant, small, medium, large, catastrophic risk can be used. The perception of risk is largely subjective and depends on the financial capacity of the individual or legal entity to compensate for damage, the availability of a statistical base and other information for risk assessment, etc.
For a specific subject, the risk is characterized by the frequency (probability) of adverse events and the severity of their consequences (Figure 1.5).
Fig. 1.5. Ratio of frequency and severity of loss
In order to determine the magnitude of the risk, it is necessary to study the risk factors that are formed under the influence of risk factors and can be divided into objective and subjective. Objective are determined by the essence of the phenomenon or object, and subjective - by the characteristics of the character and the qualities of the personality of the subject. For example, the risk of a road traffic accident is formed under the influence of objective circumstances (traffic density, road surface quality, weather conditions, car brand, driving experience, etc.) and subjective circumstances (driver's risk appetite, reaction speed, health, stress etc.). Each object is under the influence of a complex of risky circumstances, sometimes it is enough to change one of them, so that an unfavorable event occurs. For example, changing the risk situation, such as the quality of the wiring, the occurrence of its malfunction, can lead to a fire. However, it is impossible to analyze and control all risky circumstances, it is necessary to identify the most important ones.
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