Question

what do you mean by risk transfer and risk sharing?

Answer 1

Answer:

risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. risk sharing is the practice of distributing risks among organizations, departments, teams or individuals.

Explanation:

Answer 2

Risk Transfer simply involves transferring "only" risk to another person for a price. For example, the downside risk of stock can be transferred by purchasing a call option. In this way, the buyer of call option transfers its risk to the writer of the call option. Another example is insurance, wherein, the buyer of insurance transfers its risk to an insurance company.

Risk Sharing is an entirely different concept. It involves sharing (dividing) common risk among two or more persons. I think the "partnership" form of business organization is the most common (and oldest) practice of risk sharing. Banks also use this practice to lend a big amount to individual large size corporation, each bank supplying a portion of the loaned funds. In these cases "both" the profits, as well as potential losses, are shared between the parties.

extra

Retention refers to the assumption of risk of loss or damages. ... When a business retains risk, they absorb it themselves, as opposed to transferring it to an insurer. A business or individual may assume this risk through deductibles or self-insurance, or by having no insurance at all

hope it helped you