Catastrophe Risk

Catastrophe risk refers to the potential for large-scale, destructive events such as hurricanes, earthquakes, floods, or wildfires that can cause massive damage and financial loss. These events are uncertain and can have severe impacts on property, lives, and economies. Insurers assess catastrophe risk to predict the likelihood and potential cost of such events, enabling them to set premiums and build reserves. While they cannot prevent these disasters, understanding catastrophe risk helps manage the financial exposure and prepares communities for recovery efforts.