Risk Acceptance

From Open Risk Manual

Definition

Risk Acceptance denotes the process by which an entity accepts a certain risk, either because this is part of the business model (in which case it underwrites the risk) or because it is deemed as a necessary step in order achieve a business / organizational objective

Credit Risk

In credit risk context, risk acceptance occurs when there is a decision (implicit or explicit) to grant new credit to an external party (client, counterparty, supplier etc.)

Insurance Risk

Similarly to credit risk, underwriting insurance entails at the intake of new business that assessment and acceptance of a risk

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