Question

What is the primary purpose of a pool in alternative risk transfer?

a.

To provide coverage for natural disasters

b.

To aggregate insurance assets of individual companies

c.

To provide multiyear insurance coverage

d.

To insure risks solely for nuclear power stations

Posted under IC85 Reinsurance Management

Answer: (b).To aggregate insurance assets of individual companies Explanation:A pool in alternative risk transfer refers to a group of insurance companies that pool their assets together. The main purpose of a pool is to aggregate the insurance assets of individual companies, enabling them to provide a larger amount of insurance coverage than what could be provided by individual companies alone. Pools are commonly used for insuring large risks such as nuclear power stations.

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Q. What is the primary purpose of a pool in alternative risk transfer?
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