Due to Jared's poor driving record, the insurance company charged him a higher premium. This is an example of:

The situation described illustrates the concept of risk reduction effectively. When an insurance company assesses an individual's driving record, it determines the level of risk associated with insuring that individual. By charging a higher premium based on Jared's poor driving history, the insurance company is implementing a strategy to mitigate potential losses that may arise from insuring a higher-risk driver. This action serves to reduce the financial risk the company faces by aligning the premium with the perceived risk of offering coverage.

Risk avoidance, risk retention, and risk transference do not apply in this scenario. Risk avoidance involves completely eliminating a risk by not engaging in activities that create that risk. Risk retention means accepting the risk and dealing with the potential outcomes without transferring it to another party, usually by not purchasing insurance for that risk. Risk transference involves shifting the burden or risk to another party, typically through insurance arrangements, which is not explicitly occurring in Jared's situation as described. Thus, the adjustment in premiums in response to Jared's driving record clearly aligns with risk reduction practices within the insurance industry.