_______ is a device of reducing the risk undertaken by an insurance company.

Re-insurance

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Double insurance

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Risk insurance

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None of these

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Solution

The correct option is A Re-insurance
Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim. The party that diversifies its insurance portfolio is known as the ceding party.

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Similar questions

Which of the following is not a function of insurance?

(a) Risk sharing

(b) Assist in capital formation

(d) None of these

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