Probabilistic calculations in insurance focus on which key result?

Probabilistic calculations in insurance are fundamentally concerned with assessing risk through statistical methods, particularly focusing on the range of potential outcomes rather than a single precise figure. The key result of these calculations is the distribution of possible losses, represented as a spread of potentially lost amounts. This approach reflects the inherent uncertainty in predicting future losses based on historical data and helps insurers determine appropriate premiums and reserves.

In the context of insurance underwriting, understanding the spread of potential losses enables insurers to prepare for the variability and degree of risk involved in insuring different clients or events. This capability to model various scenarios is essential for effective risk management and aids in making informed underwriting decisions. By analyzing not just one possible loss but a spectrum of outcomes, insurers can better account for extreme events and manage the financial implications of that risk.