Get full access to Principles of Risk Management and Insurance, 13th Edition and 60K+ other titles, with a free 10-day trial of O'Reilly.
There are also live events, courses curated by job role, and more.
In Chapter 1 , we discussed the concept of hedging, by which risk can be transferred to a speculator through the purchase of a futures contract. An insurance contract, however, is not the same thing as hedging. Although both techniques are similar in that risk is transferred by a contract, and no new risk is created, there are some important differences between them. First, an insurance transaction typically involves the transfer of pure risks because the characteristics of an insurable risk generally can be met. However, hedging is a technique for handling speculative risks that may be uninsurable, such as protection against a decline in the price of agricultural products and raw materials.
A second difference between .
Get Principles of Risk Management and Insurance, 13th Edition now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.