Net Amount At Risk

What Does Net Amount At Risk Mean?

The net amount at risk is the difference between the face value of an insurance policy and the reserve that has been accumulated under the same policy.

Insuranceopedia Explains Net Amount At Risk

The net amount at risk represents the difference between the claim amount payable for an insured event and the reserve set aside to support that claim. This figure is significant for insurers as it indicates the potential profitability of the policy. The closer the accumulated reserve is to the face value, the smaller the loss the insurer incurs when paying out the full claim amount.