What is Basis Risk?

Basic risk refers to the risk caused by non-individual behavior. It has an impact on the entire group and society as a whole, and it is a risk that individuals cannot prevent. It refers to the risks caused by special natural disasters or major political events. Once a risk event occurs, it involves a wide range of risks and is a risk that cannot be resisted by manpower.

Basic risk

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Basic risk refers to the risk caused by non-individual behavior. It has an impact on the entire group and society as a whole, and it is a risk that individuals cannot prevent. It refers to the risks caused by special natural disasters or major political events. Once a risk event occurs, it involves a wide range of risks and is a risk that cannot be resisted by manpower.

According to the impact of risk classification, risks can be divided into basic risks and specific risks.

Among them, the basic risk is defined as follows:

For example: risks caused by earthquakes, floods, etc.