What is described as the process of identifying, assessing, and prioritizing risks in insurance?

The correct answer is risk management, which is crucial in the field of insurance. This process involves systematically identifying potential risks that could affect an organization or individual, assessing the likelihood and impact of those risks, and then prioritizing them to determine which ones should be mitigated or managed.

Effective risk management allows insurers to create policies that adequately protect against significant threats while ensuring that coverage terms are appropriate for the risks being assumed. It plays a vital role in the decision-making process for underwriting, helping insurers to establish premiums and reserve requirements based on the identified risk levels.

In contrast, claims processing refers to the procedures through which an insurer handles claims made by policyholders. Policy underwriting involves evaluating the risks associated with an individual applicant to determine insurability and setting appropriate terms and premiums. Coverage exclusion specifies what is not covered in an insurance policy, rather than focusing on risk assessment and prioritization. Thus, risk management encompasses the entire process of understanding and controlling risks in insurance, making it the most fitting term in this context.