What does Return on Risk Adjusted Capital mean? Read on to discover the definition & meaning of the term Return on Risk Adjusted Capital - to help you better understand the language used in insurance policies.
Return on Risk Adjusted Capital
A target return on equity (ROE) measure in which the denominator is adjusted depending on the risk associated with the instrument or project. This is a term used in the financial services industry and in enterprise risk management (ERM). In the insurance industry, risk-adjusted return on capital (RAROC) is the term commonly used.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
c: The sum for which something is insured.
We hope the you have a better understanding of the meaning of Return on Risk Adjusted Capital. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for: