Risk Appetite
Plain English Definition: Risk Appetite refers to the level of risk an insurer is willing to accept while providing coverage.
What Risk Appetite really means for someone with an insurance policy
Insurers evaluate risk appetite to determine the types of policies they offer and the level of risk they are willing to underwrite.
Risk Appetite Real World Examples
- An insurance company specializing in high-risk businesses like construction has a high-risk appetite.
- A life insurer offering coverage only to healthy individuals has a low-risk appetite.
- A pet insurer covers breeds prone to illness, reflecting a moderate risk appetite.