There is a difference between estimating a risk with exactitude and predicting with exactitude that an event will or will not happen. Suppose we can accurately

There is a difference between estimating a risk with exactitude and predicting with exactitude that an event will or will not happen. Suppose we can accurately say that I have an annual risk of a certain event happening to me as 1/1000 - this is neither a prediction that it will happen to me nor that it will not. If we form an insurance pool of 1000 people all with the same risk, and we each annually put in 1/1000 of the cost of the event to one person, we would have coverage against being unlucky (subject to the usual caveats of liquidity, uncertainty and changing circumstances.)