What does the term "managed risk" refer to in insurance?

The term "managed risk" in insurance specifically refers to the strategies and measures implemented to minimize the likelihood of adverse events occurring. This proactive approach involves identifying potential risks and taking steps to mitigate them, thereby reducing the overall impact of those risks on individuals or businesses.

By focusing on prevention and risk control, managed risk aims to create a safer environment and maintain financial stability. This not only benefits the insured party by potentially lowering their premiums but also helps insurers manage their overall exposure to loss.

While other options may relate to different aspects of financial management or insurance practices, they do not encapsulate the essence of "managed risk." Predicting future premiums and pursuing aggressive investment strategies do not directly address the concept of risk management itself, and ignoring potential risks contradicts the very notion of managing risk effectively.