Risk Retention
Risk Retention is a strategy in insurance where a company chooses to handle certain financial risks themselves instead of buying insurance from outside providers. Think of it like a company setting aside its own money to cover potential future losses rather than paying premiums to an insurance company. Companies might do this when they find it cheaper to handle smaller risks internally or when traditional insurance is too expensive. This approach is commonly used alongside regular insurance, where companies might keep (retain) smaller risks while insuring larger ones.
Examples in Resumes
Developed and implemented Risk Retention strategies resulting in 30% cost savings
Analyzed and recommended optimal Risk Retention levels for Fortune 500 clients
Managed corporate Risk Retention programs and self-insurance initiatives
Led team responsible for evaluating Risk Retention Group formations
Typical job title: "Risk Managers"
Also try searching for:
Where to Find Risk Managers
Professional Associations
Online Networks
Industry Resources
Example Interview Questions
Senior Level Questions
Q: How would you determine the optimal risk retention level for a large corporation?
Expected Answer: Should discuss analyzing company financials, loss history, risk tolerance, available capital, and cost-benefit comparison between insurance premiums and self-insurance options. Should mention creating financial models and considering multiple scenarios.
Q: Can you explain how you would structure a risk retention program alongside traditional insurance?
Expected Answer: Should explain layering of risks, determining deductible levels, identifying which risks to retain vs transfer, and how to integrate with existing insurance programs while considering company's financial capacity.
Mid Level Questions
Q: What factors do you consider when evaluating whether to retain or transfer a risk?
Expected Answer: Should mention frequency and severity of potential losses, cost of insurance vs self-funding, company's financial strength, regulatory requirements, and impact on business operations.
Q: How do you measure the success of a risk retention program?
Expected Answer: Should discuss comparing actual losses to expected losses, cost savings vs traditional insurance, impact on cash flow, claim handling efficiency, and overall program stability.
Junior Level Questions
Q: What is the difference between risk retention and risk transfer?
Expected Answer: Should explain that risk retention means keeping the financial responsibility for potential losses within the company, while risk transfer means paying another party (usually an insurance company) to take on that responsibility.
Q: What are the basic components of a risk retention program?
Expected Answer: Should mention dedicated funds for expected losses, procedures for claims handling, loss prevention measures, and regular program monitoring and reporting.
Experience Level Indicators
Junior (0-2 years)
- Basic understanding of insurance concepts
- Risk assessment basics
- Data analysis and reporting
- Understanding of loss prevention
Mid (2-5 years)
- Program implementation
- Financial analysis
- Claims management
- Risk assessment and evaluation
Senior (5+ years)
- Strategic program development
- Complex financial modeling
- Enterprise risk management
- Program optimization and cost control
Red Flags to Watch For
- No understanding of basic insurance concepts
- Lack of financial analysis skills
- No experience with risk assessment
- Poor understanding of regulatory requirements
- Limited knowledge of claims management processes
Related Terms
Need more hiring wisdom? Check these out...
Unlock Hidden Talent: How Internal Rotation Programs Spark Career Exploration and Boost Retention
Salary Transparency Laws: What HR Leaders Need to Know
Succession Planning: Your Company's Future-Proof Strategy
