- 1. Shared risk, is when insurance is purchased, and the burden of the risk is shared among a number of insureds who have the same chance and uncertainty of an event occurring. A pooling concept is used to make predictions.
- 2. Transferred is a risk of loss transferred to the insurance company when insurance is purchased.
is a risk to avoid a risk, a person with fear of flying may choose to drive instead; avoiding a risk may sometimes be difficult, but it usually not impossible.
is a risk when a person decides to assume financial responsibility for certain events by not buying an insurance policy, and instead considers his own personal assets.
risk is controlled, e.g., when a person with high blood pressure begins making a healthier lifestyle choices, such as losing weight or quitting smoking, thereby reducing his chances of a stroke.