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The primary disadvantage of risk retention is that it can lead to significant financial exposure if the retained risks materialize, resulting in unexpected costs or losses. Organizations may underestimate potential risks or lack adequate reserves to cover them, which can strain financial resources. Additionally, relying on risk retention may limit opportunities for diversification and risk transfer, potentially compromising overall risk management strategies.
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What is the difference between risk retention and self insured?
Risk retention refers to the ability to accept risk and or can be referred to as risk taking, however self insured refers to a situation when someone is very much hopeful
What are the advantage and disadvantage of risk transfer?
advantages of risk transfer
What does risk retention mean?
Risk retention is a form of self-insurance. An organization sets aside a reserve fund to be able to offset unexpected claims.
What is the difference between risk retention and risk transfer?
Risk retention is when a company decides to bear the financial impact of a potential loss itself, while risk transfer involves shifting the risk to another party through insurance or other financial arrangements. Risk retention allows a company to potentially save on insurance premiums but also exposes it to higher financial losses, while risk transfer helps mitigate potential losses by passing them onto another party.
What are acceptable risks in a Risk Retention Group?
A Risk Retention Group is a type of insurance formed by members who associate specifically to form an insurance pool. Acceptable risk is the level of loss that such an association can handle and remain solvent.
How do you calculate risk retention?
no of policies renewed/no of potential renewal policies
Disadvantages of pilot study?
disadvantage is only risk of life.
Is fluid retention caused by high or low potassium in the body?
It is excessive salt intake (sodium) which can place an individual at risk of fluid retention.
What are the considerations that affects choice between risk retention and risk transfer?
When choosing between risk retention and risk transfer, key considerations include the organization's risk tolerance, financial capacity, and the potential impact of the risk on operations. Risk retention may be preferred if the likelihood of loss is low or if the costs of transferring the risk (such as insurance premiums) outweigh potential losses. Conversely, risk transfer is often favored for high-impact risks that could significantly disrupt business operations or financial stability. Additionally, regulatory requirements and the availability of viable transfer options can influence this decision.
What is disadvantage of police officer and car racer?
The disadvantage of the police officer and car racer is that the risk associated with their jobs is high.
What is difference between active passive risk retention?
Retaining risk passively - Understanding the risk without taking any actions to prevent possible outcomes. Active retention - preparing for risk to happen, having plan for in case it would happen. Some form of self insurance (direct insurance would be form of transferring risk.)
What are the advantages and disadvantage of sale risk?
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