1 2 3 4 5 7 8 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
R/ Ra Rb Rc Rd Re Rf Rh Ri Ro Rp Rr Rt Ru Rx Ry
Rid Rie Rig Rin Rio Ris Riv

Risk charge

An amount identified in some reinsurance agreements as specifically to be retained by the reinsurer for assuming the risk under the policies reinsured a share of the profits in excess of the risk charge is returned to the cedant as an experience refund.

Risk class

Group of insured individuals who have a similar risk to the insurance company. Common risk classes are standard, preferred, nonsmoker, substandard, and uninsurable.

Risk Classification

The process by which a company decides how its premium rates for life insurance should differ according to the risk characteristics of individuals insured (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications. (See: Underwriting)
***
UK: Underwriters combine individual risks into groups or ‘classes. This facilitates the underwriting process and enables individual proposals to be considered in the light of the class to which they belong. Some classes, e.g. total abstainers, mature applicants, may receive preferential treatment while others may belong to an excluded class, e.g. a motor insurer might exclude jockeys or others with a high exposure.

Risk combination

Homogeneous groups of risks among whom the losses of the few can be distributed. There is no substantial advantage in two people combining to share each other’s losses, reciprocity excepted. It is only by large homogeneous groups combining through insurance that makes it possible to apply the law of large numbers. Risk combination is at the heart of insurance. The loss lighteth rather easily upon many than heavily upon few’ (Elizabethan Act 1601).

Risk contract

1. Provider’s agreement with a managed care plan to deliver medical services to members for a determined, fixed payment without knowing the cost of the services. The provider is responsible for managing the medical care and risks losing money if total expenses are more than the predetermined amount of funds. 2. In a Medicare risk contract, the federal government sends monthly fixed payments to the managed care plan for services given to Medicare beneficiaries who join the plan and agree to receive all medical care through the plan. The plan is at risk for services regardless of the extent, expense, or intensity of services rendered. Sometimes an additional fee may be paid by each enrollee. Medicaid beneficiaries enrolled in risk contracts are not required to pay monthly premiums.

Risk control

Implementation of risk treatment decisions. Individuals will be made responsible to see that the control measures are implemented and maintained in accordance with agreed timescales. Monitoring risk and their control measures is a vital part of an iterative process.
***
Risk control measures attack risk by lowering the chance that a loss will occur or by reducing its severity if it does occur.

Risk Control Alternatives

Risk Avoidance : To completely eliminate the chance of a particular type of loss.Loss Prevention : To reduce (but not totally eliminate) the chance of a given loss:
Loss Reduction : To reduce the severity of those losses which do occur;

Separation or Diversification of Loss Exposure : To reduce concentration of value subject to a single accident and to make aggregate losses more predictable:

Non-Insurance Transfers : Rid the organization of any responsibility for the loss:

Risk Costs

The costs imposed by the existence of risk can be identified in three areas: Cost of the Loss : This includes both direct and indirect costs. (i) Direct costs being those immediately attributable to the event – e.g. repairs to a damaged vehicle, replacement of goods damaged as the result of a collision, third party compensation, if necessary, assessor’s expenses etc. Cost of Handling Risk : Tim spent on identification, analysis and negotiation of insurance covers could be more profitably employed in income generating activities. The additional monetary costs of loss prevention and reduction together with the costs of consultancy fees and insurers’ profit loading serve to reduce the profitability of the company. Costs Imposed by Risk : Because we live in an uncertain world, individuals are willing to pay amounts in excess of the sums which they stand to lose, on average, in the long term i.e., over their lifetime. This is known as the expected value of loss. The cost of risk, is thus, dependent on three variables, viz., (a) Risk control measures, (b) Uninsured losses and (c) Insurance.Risk, Costs, Distribution of Cost of Risks basis : Private Costs are those costs necessarily incurred by the individual or firm engaging in a particular activity. Social Costs are those which fall on the community at large arising out of that activity.Risk, Cost of : Expenditures which an entity makes because of its exposures to accidental losses. Cost of risk can be computed as the sum of retained losses, plus Insurance premiums, plus expenditures for loss control, plus the administrative cost of operating a risk management.