Return on risk-adjusted capital (RORAC)

{
  "id": "MLC-T-INS-002948",
  "term": "Return on risk-adjusted capital (RORAC)",
  "field": "Insurance and risk management",
  "definition": "A financial metric that measures profitability in relation to the amount of capital required to support a specific business activity, considering its risk level. The return on risk-adjusted capital (RORAC) is calculated by dividing the net income from an activity by its allocated risk capital. This ratio is used by financial institutions to compare the performance of different business units and to make capital allocation decisions.",
  "abbreviation": "RORAC",
  "url": "https://mlchart.com/terminology/insurance/return-on-risk-adjusted-capital-rorac/"
}