Risk concentration

Term · Insurance and risk management · MLC-T-INS-002965

A situation where an insurer's potential losses are clustered around a single risk factor, such as a specific geographic area, industry, or type of event. This exposure to a single peril or a group of correlated perils increases the potential for a large loss from one occurrence. For example, a high concentration of property policies in a coastal region creates vulnerability to a single hurricane, which can lead to insolvency if not properly managed through reinsurance or capital reserves.

Table 1. Record
Identifier	MLC-T-INS-002965
Field	Insurance and risk management

Record as JSON

{
  "id": "MLC-T-INS-002965",
  "term": "Risk concentration",
  "field": "Insurance and risk management",
  "definition": "A situation where an insurer's potential losses are clustered around a single risk factor, such as a specific geographic area, industry, or type of event. This exposure to a single peril or a group of correlated perils increases the potential for a large loss from one occurrence. For example, a high concentration of property policies in a coastal region creates vulnerability to a single hurricane, which can lead to insolvency if not properly managed through reinsurance or capital reserves.",
  "url": "https://mlchart.com/terminology/insurance/risk-concentration/"
}

Record 3,008 of 3,708 in Insurance and risk management terminology (MLC-0106). Request the full dataset.