Risk Financing
Definition
Risk Financing — achievement of the least-cost coverage of an organization's loss exposures,
while ensuring post-loss financial resource availability. The risk financing
process consists of five steps: identifying and analyzing exposures, analyzing
alternative risk financing techniques, selecting the best risk financing
technique(s), implementing the selected technique(s), and monitoring the
selected technique(s). Risk financing programs can involve insurance rating
plans, such as retrospective rating, self-insurance programs, or captive
insurers.