Risk assessment is the process of evaluating and analyzing potential risks that may be associated with a particular action or decision.

In the insurance industry, risk assessment is used to determine the likelihood and potential impact of a specific event, such as a car accident or natural disaster, in order to price insurance policies appropriately.

The assessment considers various factors, such as the insured person’s age, health, driving record, and other relevant information, to calculate the likelihood of a claim being made and to set premiums accordingly.

Risk assessment is also used in other industries, such as finance and healthcare, to evaluate and manage risks associated with various business operations.