Which of the following is a consequence of transferring risk to an insurance company?

Question

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Transferring risk to an insurance company typically involves paying premiums in exchange for protection against large losses. While there may be costs associated with paying these premiums, the benefit is that the firm is guaranteed a small loss instead of facing potentially catastrophic losses. This can help to mitigate financial risk and stabilize earnings over time. However, it is important to note that insurance does not eliminate risk altogether and there may still be some residual risk that the firm must manage.

Which of the Following Is a Consequence of Transferring Risk