MLchartDataset catalogue

Noncorrelated risks

Term · Insurance and risk management · MLC-T-INS-002329

Exposures to loss that are statistically independent, meaning the occurrence or severity of one loss has no bearing on the probability or severity of another. Insurers and investors combine these risks within a portfolio to achieve diversification, as the law of large numbers operates more effectively when losses are not simultaneous. For example, the risk of a hurricane in Florida is not correlated with the risk of an earthquake in California.

Table 1. Record
IdentifierMLC-T-INS-002329
FieldInsurance and risk management
Record as JSON 
{
  "id": "MLC-T-INS-002329",
  "term": "Noncorrelated risks",
  "field": "Insurance and risk management",
  "definition": "Exposures to loss that are statistically independent, meaning the occurrence or severity of one loss has no bearing on the probability or severity of another. Insurers and investors combine these risks within a portfolio to achieve diversification, as the law of large numbers operates more effectively when losses are not simultaneous. For example, the risk of a hurricane in Florida is not correlated with the risk of an earthquake in California.",
  "url": "https://mlchart.com/terminology/insurance/noncorrelated-risks/"
}

Record 2,302 of 3,708 in Insurance and risk management terminology (MLC-0106). Request the full dataset.