As the number of insured units increases, the number of losses decreases. True or False?
False
Purchasing insurance is an example of risk
transference
Which one of these is NOT considered to be an element of an insurable risk?
Speculative risk
The Law of Large numbers enables an insurer to
predict losses
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?
Reinsurance contract
Risk ____ is the process of analyzing exposures that create risk and designing programs to handle them.
management
How can an insurance company minimize exposure to loss?
Reinsuring risks
Which of the following can be defined as "the potential for loss"?
Risk
Which of the following describes the act of insuring a risk against possible loss?
Risk transfer
A business becoming incorporated is an example of risk ____.
transfer
According to the law of large numbers, how would losses be affected if the number of similar insured units increases?
Predictability of losses will be improved
Which of the following is NOT an example of risk retention?
Not doing a business deal after deciding it would be too risky
What type of risk involves the potential for loss with no possibility for gain?
Pure risk
A hold-harmless clause is an example of risk
transfer
Which of the following can be defined as a cause of a loss?
Peril
As the number of insured units increases, the number of losses decreases. True or False?
False
Purchasing insurance is an example of risk
transference
Which one of these is NOT considered to be an element of an insurable risk?
Speculative risk
The Law of Large numbers enables an insurer to
predict losses
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?
Reinsurance contract
Risk ____ is the process of analyzing exposures that create risk and designing programs to handle them.
management
How can an insurance company minimize exposure to loss?
Reinsuring risks
Which of the following can be defined as "the potential for loss"?
Risk
Which of the following describes the act of insuring a risk against possible loss?
Risk transfer
A business becoming incorporated is an example of risk ____.
transfer
According to the law of large numbers, how would losses be affected if the number of similar insured units increases?
Predictability of losses will be improved
Which of the following is NOT an example of risk retention?
Not doing a business deal after deciding it would be too risky
What type of risk involves the potential for loss with no possibility for gain?
Pure risk
A hold-harmless clause is an example of risk
transfer
Which of the following can be defined as a cause of a loss?
Peril