Risk transfer

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Risk transfer

The shifting of risk through insurance or securitization of debt because of risk aversion.

Risk Transfer

The reduction of risk to a position by buying an insurance policy or taking an offsetting position. For example, a person may reduce the risk of loss due to medical expenses by buying health insurance. Likewise, a person may reduce the risk of loss to a long position by entering an equal but opposite short position. See also: Hedge.
References in periodicals archive ?
Sponsors also continue to shrink benefit obligation footprints through pension risk transfers, where a sponsor buys lifetime annuity contracts from an insurer.
Global Banking News-September 23, 2016--Fannie Mae completes credit insurance risk transfers
Pension risk transfers are not limited to plans that have been closed or frozen.
He urged credit unions to pay attention to the common securitization platform and credit risk transfers because they provide opportunities that are member focused and have strong underwriting.
The purpose of the risk transfers is to offset variations in plan actuarial risk due to risk selection, beyond the premiums plans are able to collect.
In a release detailing the latest index results, Geoff Dietrich, vice president of Dietrich & Associates, stated that many plan sponsors have executed pension risk transfers over the past 60 days.
In transferring risk to the private sector, the public partner seeks to put in place incentives for the private contractor to perform efficiently but also endeavors to minimize risk premiums by limiting risk transfers to those risks which the private sector is best placed to manage (European Commission DGRP, 2003).
Too often, however, the importance of the deal takes precedence, and risk transfers are not properly effected, making your organization potentially responsible for loss exposures for which others should be responsible.
The purpose of this research study was to expand nursing science through the collaborative investigation of registered nurses' experiences of the effect of insurance risk transfers such as capitation contracts, managed care programs, Diagnosis Related Groups (DRG) financing mechanisms and intra-organizational insurance risk transfers, on caregiving environments, registered nurses, and their clients.
Some of these insurance products may result in incomplete risk transfers, which could cost your camp money and threaten your assets.
With less capacity in the market, interest in alternative risk transfers, such as catastrophe bonds, may increase, Booth said.
By reducing an insurer's probability of insolvency, risk distribution has the effect of enhancing the efficiency of risk transfers because it enhances the insurer's ability to make good on its promises.