hybrid
A type of risk financing plan that makes use of both internal and external
funds to pay losses. It thus falls between a pure transfer approach and a pure
retention approach to risk. The costs of hybrid techniques tend to be less experience-responsive
as compared to pure retention but more experience-responsive as compared to
pure transfer techniques. Examples of hybrid techniques include pooling arrangements,
high-deductible plans, multiple-parent captives, and retrospectively rated insurance
policies.
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