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The backbone of insurance is risk.  It is assessing risk, allocating risk, pricing risk, and insuring risk.  The insurance industry is – in a word – one of risk.

To help calculate risk, the industry has built sophisticated models and algorithms, designed to measure the likelihood of certain events and scenarios.  These predictive models quantify the odds of your car getting wrecked, your home being damaged, or – as Nationwide so morbidly reminded us – the odds that your child might die from a preventable accident.

The insurance industry, of course, insures risks beyond the home ...