1. InsuranceAn insurance policy transfers a specific set of risks such as the fire and flood risk for a particular asset.
2. DerivativesA derivative is a financial product that derives its value from the value of an underlying entity such as an asset or interest rate. They are often purchased by businesses as a hedge against financial risks such as exchange rate risk.
3. OutsourcingOutsourcing a project or process typically transfers a variety of risks to a partner. Such transfers are specified in contract terms. For example, penalties may be put in place that are triggered if a project or process doesn't meet a set of minimum requirements.
|Overview: Risk Transfer|
|Definition||A contractual agreement that transfers risk to a third party, typically for a fee.|