Risk Acceptance

From Open Risk Manual


Risk Acceptance. A management decision to take no action to mitigate the impact of a particular Risk (or Residual Risk after Risk Mitigation).

Specifically it 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 condition in order achieve a business, organizational or community objective

Risk Type Risk Acceptance Processes
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

See Also