MANAGEMENT

Detailed explanation-1: -Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.

Detailed explanation-2: -There are six loss-control techniques used by risk managers to manage identified risks: avoidance; loss prevention; loss reduction; separation; duplication; and diversification. Each of these techniques makes losses more predictable and can reduce loss frequency or loss severity.

Detailed explanation-3: -28) Low-frequency, low-severity loss exposures are best handled by A) avoidance.

Detailed explanation-4: -There various sources that equip risk managers with the necessary information that helps in the identification of loss exposure. Some of the sources are; financial statements, market research, experience, legislation, industry practice, and experience.