Active Retention

AAA

DEFINITION of 'Active Retention'

The practice of protecting against a loss via the designation of specific funds to pay for the expected amount of the loss. This contrasts to passive retention, in which no money is set aside to cover expected losses.

INVESTOPEDIA EXPLAINS 'Active Retention'

The process of active retention makes it possible to protect against losses of relatively small amounts that occur regularly. It is regarded as a form of self-insurance. One of the benefits of active retention is the avoidance of the administrative costs associated with seeking insurance from another party.

RELATED TERMS
  1. Business Risk Exclusion

    A type of coverage that is often omitted from product liability ...
  2. Insurance Underwriter

    A financial professional that evaluates the risks of insuring ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Premium

    1. The total cost of an option. 2. The difference between the ...
  5. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
  6. Certificate Of Insurance

    A document issued by an insurance company/broker that is used ...
Related Articles
  1. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  2. Home & Auto

    Are My Investments Insured Against Loss?

    Money invested in a brokerage account has some protection, but that doesn't mean you can't lose it.
  3. Options & Futures

    20 Investments You Should Know

    To take advantage of all your investing options, you need to know what your choices are. Here we tell you about the diverse features and advantages of 20 different financial instruments.
  4. Insurance

    Finding The Best Health Insurance You Can Get

    A close look at the pros and cons of Aetna vs. Cigna PPO health insurance helps you decide what's important for you.
  5. Insurance

    Avoid The No-Health-Insurance Penalty By Feb 15

    If you don't have health insurance, act NOW or you could owe penalties on your 2015 taxes, in addition to this year's.
  6. Professionals

    Why Investors Need to Rebalance Their Portfolios

    The best way to explain why one should rebalance their portfolio is to show what could go wrong if one doesn't.
  7. Insurance

    Rating Assurant Prepaid Vs. Delta PPO dental plans

    As more consumers – and dentists – join insurance plans, here’s help in choosing benefits that are right for you.
  8. Professionals

    What are some examples of common fringe benefits?

    Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase total compensation for employees.
  9. Personal Finance

    What Exactly Does A Portfolio Analyst Do?

    Portfolio analysts have the exciting role of working between the investment team layers and they touch various aspects of an investment organization.
  10. Professionals

    What's the average salary of an actuary?

    Get insight into the intriguing career of risk analysis and forecasting. How much do actuaries make, and how is this field expected to fare in the coming years?

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center