Which term is associated with the idea of transferring risk in insurance practices?

The term associated with the idea of transferring risk in insurance practices is "Transfer." In the context of insurance, risk transfer refers to the process by which an individual or business shifts the financial responsibility for certain risks to an insurance company. By purchasing insurance, the policyholder pays a premium in exchange for the insurer's commitment to cover specific losses or liabilities that might arise. This mechanism allows individuals and organizations to protect themselves from the potential financial impact of unforeseen events, such as accidents, natural disasters, or legal liabilities.

While other terms like "Retention" refer to keeping the risk for oneself and accepting the financial consequences, "Transfer" clearly emphasizes the movement of risk away from the insured party to the insurance provider. This is a fundamental concept in risk management and insurance, highlighting how companies and individuals can mitigate financial uncertainty.