Optimum level of risk retention

Term · Insurance and risk management · MLC-T-INS-002424

The level of retained risk at which an organization's total cost of risk, made up of retained losses, insurance premiums, administration and the cost of uncertainty, is lowest. It sits below the most the organization could afford to lose, and it is found by comparing premiums with expected retained losses and the volatility the organization can absorb. A higher retention is usually chosen as financial capacity grows.

Table 1. Record
Identifier	MLC-T-INS-002424
Field	Insurance and risk management

Record as JSON

{
  "id": "MLC-T-INS-002424",
  "term": "Optimum level of risk retention",
  "field": "Insurance and risk management",
  "definition": "The level of retained risk at which an organization's total cost of risk, made up of retained losses, insurance premiums, administration and the cost of uncertainty, is lowest. It sits below the most the organization could afford to lose, and it is found by comparing premiums with expected retained losses and the volatility the organization can absorb. A higher retention is usually chosen as financial capacity grows.",
  "url": "https://mlchart.com/terminology/insurance/optimum-level-of-risk-retention/"
}

Record 2,414 of 3,708 in Insurance and risk management terminology (MLC-0106). Request the full dataset.