The statement that is NOT correct is: b) The insurable risk needs to be statistically predictable.
Insurable risks do not necessarily need to be statistically predictable. In fact, many insurable risks involve unpredictable events or occurrences. Insurers use actuarial science and statistical analysis to assess risk and set premiums, but the predictability of an individual event may vary. Some risks, such as natural disasters or accidents, are inherently unpredictable on an individual basis. Insurability is more about the ability to spread the risk among a large pool of insured individuals, allowing the insurer to manage risk effectively.
So, the correct answer is option B, i.e., the statement in option B is not correct.
Question:
Which statement regarding insurable risks is NOT correct?
A. Insurance cannot be mandatory.
B. The insurable risk needs to be statistically predictable.
C. An insurable risk must involve a loss that is definite as to cause, time, place and amount.
D. Insureds cannot be randomly selected.