The transfer of insurable risk to the capital markets through the creation of a financial instrument is called
A)coefficient of risk.
B)securitization of risk.
C)financial risk management.
D)enterprise risk management.

Question

Quizplus · Accepted Answer

The securitization of risk refers to the transfer of insurable risk to the capital markets through the creation of a financial instrument, such as an insurance-linked security (ILS) or catastrophe bond. This allows investors to assume the risk of potential losses from natural disasters or other events, providing insurers with additional sources of capital to cover potential claims.

The Transfer of Insurable Risk to the Capital Markets Through