Risk-adjusted return on risk-adjusted capital (RARORAC)

{
  "id": "MLC-T-INS-002994",
  "term": "Risk-adjusted return on risk-adjusted capital (RARORAC)",
  "field": "Insurance and risk management",
  "definition": "A financial performance measure that evaluates the return generated by an activity relative to the risk-adjusted capital required to support it. Unlike RAROC, both the return and the capital are adjusted for risk. This metric provides a more refined assessment of profitability by accounting for the risk inherent in both the earnings and the capital base.",
  "abbreviation": "RARORAC",
  "url": "https://mlchart.com/terminology/insurance/risk-adjusted-return-on-risk-adjusted-capital-rarorac/"
}