Which risk management technique involves keeping risk rather than eliminating or transferring it?

The technique of risk retention involves accepting the potential consequences of a risk rather than attempting to eliminate it or transfer it to another party. This approach is often applied when the cost of mitigating or transferring the risk is higher than the potential loss that could occur if the risk materializes.

In risk retention, an organization or individual acknowledges the risk and decides to bear it, often setting aside resources to cover potential losses. This strategy is commonly used for risks that are considered manageable or low in probability, where the potential impact is deemed tolerable.

This technique is suitable for organizations that have a strong risk management plan in place and feel confident in their ability to absorb and respond to the risks they choose to retain. Understanding the nature of different risks and assessing their likelihood and potential impact is critical in determining whether retention is the appropriate course of action.