Amount of additional premium or return premium for each successive period determined by comparing the current period’s indicated retro premium to the preceding period’s retro

Transaction that transfers liability from the reinsurer to another insurer, perhaps even back to the primary insurer, in whole or in part.

Are directed to the past and contemplative of post-loss situations. Two types – loss portfolio transfers and aggregate loss contracts.

Rating plan that adjusts the premium, subject to a certain minimum and usually a maximum, periodically to reflect the actual loss experience of the insured.

Rating plan that adjusts the premium, subject to a certain minimum and usually a maximum, periodically to reflect the actual loss experience of the insured. 

A rider that can be attached to many life, health, disability and LTC policies (for an extra charge), that will return all or part of

Measure of the return on assets; net income divided by total assets.

Measure of the return on equity; net income divided by stockholders’ equity.

A highly flexible ratio measuring the financial benefits of an investment activity to its costs.

A status in which a life policy can be changed without the consent of the beneficiary. The owner of the policy can change any part

A provision that an insurer attaches to a policy to expand or restrict the benefits of the policy.

The chance of loss; the uncertainty of loss; the variation from the expected outcome over time; the difference between expected losses and actual losses.

Uncertainty that may be either positive or negative arising from a given set of circumstances. Common definitions also include: 1) chance or probability of loss,

Visual analytical tool utilized to communicate key risks; it presents the risks with the highest impact and probability; can range from simple to complex depending

Implementation and monitoring of the Risk Management Process; a step of the Risk Management Process.

The assessment of the potential impact of various exposures on an organization; a step of the Risk Management Process.

The organization’s willingness to accept or tolerate risk.

Any conscious action or inaction to minimize at the optimal cost, the probability, frequency, severity, or unpredictability of loss; a step of the Risk Management

The use of back-ups for critical systems or operations; a risk control technique in which the goal is to reduce overall severity.

The acquisition of internal and external funds to pay losses at the most favorable cost; a step of the Risk Management Process.

Process of identifying and examining exposures of an organization; the first and most important step of the risk management process.

The practice of protecting an organization from financial harm by identifying, analyzing, and controlling risk at the lowest possible cost.

Process of managing uncertainty of exposures that affect an organization’s assets and financial statements using five steps: identification, analysis, control, financing and administration.

Information system that supports the user in identifying, measuring and managing risks in the organization or other organizations.

States the purpose and overall goal of the risk management program and guides the actions and decision-making of the risk manager.