MLchartDataset catalogue

Risk-adjusted return on capital (RAROC)

Term · Insurance and risk management · MLC-T-INS-003730

A financial performance metric that evaluates the profitability of a business unit, project, or transaction in relation to the economic capital required to support its risks. RAROC accounts for the level of risk taken to generate returns, providing a more accurate measure of performance than traditional return on capital. It is calculated by dividing risk-adjusted net income by economic capital.

Table 1. Record
IdentifierMLC-T-INS-003730
FieldInsurance and risk management
AbbreviationRAROC
Record as JSON 
{
  "id": "MLC-T-INS-003730",
  "term": "Risk-adjusted return on capital (RAROC)",
  "field": "Insurance and risk management",
  "definition": "A financial performance metric that evaluates the profitability of a business unit, project, or transaction in relation to the economic capital required to support its risks. RAROC accounts for the level of risk taken to generate returns, providing a more accurate measure of performance than traditional return on capital. It is calculated by dividing risk-adjusted net income by economic capital.",
  "abbreviation": "RAROC",
  "url": "https://mlchart.com/terminology/insurance/risk-adjusted-return-on-capital-raroc/"
}

Record 3,037 of 3,708 in Insurance and risk management terminology (MLC-0106). Request the full dataset.