The risk, other than financial risk, that is transferred from the holder of an insurance contract to the issuer. This risk, though not financial in nature, can result in financial losses: when the insured event occurs and a claim is filed, so that the insurance company will have to pay the holder (policyholder) the reimbursement amount specified in the contract.

Broadly speaking, insurance risk refers to the possibility of insured risk taking place such as loss, damage, theft, accident, and so on, which is covered by an insurance contract. For example, a fire may break out and destroy the property insured by a policy: the insurance firm (insurer) will be at an insurance risk when the benefits (payable to the insured) are equal to or less than the total amount of the premiums paid by the insured so far.

In concept, insurance risk differs from insurable risk and insured risk (difference between insurance risk, insurable risk and insured risk).