Risk Management Flashcards
1
Q
How is risk mitigation a form of intermediary?
A
Risk mitigation is basically an insurance company. Investors get together and contribute to a fund which covers the losses of those that have suffered. Without the central organisation - the insurance company - this would not be possible.
2
Q
What is a reinsurer?
A
Basically a backup insurance company who specialise in insurance such as natural disasters where the insurance company wouldn’t be able to pay everyone.
