Spread of Risk

Written by  //  June 24, 2011  //  Insurance Glossary: N-S, Insurance Terms  //  Comments Off on Spread of Risk

The spread of risks refers to whether or not the risks assumed by the company are spread out or are they concentrated in one type of risk, such as earthquake insurance in California. If the latter is the case, the company is vulnerable to one natural catastrophe that could impact the solvency of the company. Ideally, an insurer desires to diversify risks.

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