Question

Why would an insurance company want people to avoid risk, like Nick Cannon having to avoid skydiving?

Answer 1

An insurance company wants people to avoid risks because if the person meets with an accsident the expense of the medicines and treatment should be covered by the insurance company.

Answer 2

Answer:

Researching a little bit, Nick Cannon is a rapper, comedian and record producer, none of his career choices include skydiving as a regular job-hazard activity.

In the eyes of the insurance company, this activity is categorized as a Risk, not only a life threatening risk, but a monetary risk.

When the company covered Nick, they probably didn't care whether or not he would perform a set, or sing a new song, etc., but in skydiving, Nick would be putting himself, and the insurance company, at risk.

If he happened to get injured, the company would be the one covering the hospital's bills, and potentially losing income, that when compared to Nick's income, would not be worth it, he would become an expensive asset.

Yet this is exactly the reason why Nick has an insurance, so he could transfer risk, or the chance of loss, to another party. The Company is thinking on managing and balancing responsibility and risk, Nick in the transfer of risk. The company would like to avoid it to prevent having to lose income.