A RISK event that is characterized by high severity and low frequency, leading to a large difference between expected and actual aggregate losses. Common catastrophic hazards include natural and humanmade events such as earthquakes, hurricanes, windstorms, and terrorism. Although many catastrophic hazards can be protected via INSURANCE, REINSURANCE, or INSURANCELINKED SECURITIES some cannot, as the risk of loss may be too large or the required PREMIUM too high. See also CATASTROPHIC LOSS, CLASH LOSS, SHOCK LOSS.

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