Transferable risk
From ACT Wiki
Risk can usefully be defined as transferable and non-transferable.
Transferable risks are those which can be transferred to someone else, e.g. hedged with risk management products, or passed to an insurer. In this way you can export transferable risks out of your firm (for a price).
An example of a transferable risk is a foreign exchange exposure.
A firm can eliminate this risk by entering into a foreign exchange transaction with a bank, thus fixing the rate; what was the firm’s risk now becomes the bank's risk.
Naturally the bank will price the foreign exchange transaction so that it earns an appropriate reward for accepting and managing the related risk.
