What is the main function of risk assessment in insurance?

The primary function of risk assessment in insurance is to evaluate the likelihood of a claim occurring. This process involves identifying potential risks and analyzing the factors that may contribute to those risks. By understanding the probability and potential impact of various risks, insurers can determine appropriate coverage and pricing for policies. Risk assessment helps insurers quantify the risks they are taking on and enables brokers to advise clients on the necessary coverage to protect against those risks.

In contrast, negotiating with insurers on behalf of clients focuses on securing terms and pricing, which is a separate aspect of the insurance process. Promoting insurance products revolves around marketing and selling, which also does not directly pertain to assessing risk. Managing claims occurs after a claim has been filed, which is yet another distinct phase in the insurance lifecycle. Understanding risk and its implications is foundational in the insurance process, making the evaluation of the likelihood of a claim occurring the core function of risk assessment.