Risk Acceptance
From Open Risk Manual
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 |
|---|---|
| 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 |
