Difference between revisions of "Risk Acceptance"
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== Definition == | == Definition == | ||
− | '''Risk Acceptance'''. A management decision to take no action to mitigate the impact of a particular | + | '''Risk Acceptance'''. A management decision to take no action to mitigate the impact of a particular [[Risk]] (or [[Residual Risk]] after [[Risk Mitigation]]). |
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+ | 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 | ||
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Latest revision as of 15:37, 10 August 2021
Definition
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 |
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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 |