Net Amount at Risk

Published: | Updated: January 7, 2018

Definition - What does Net Amount at Risk mean?

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

Insuranceopedia explains Net Amount at Risk

The difference captured in the net amount at risk is the one between a claim amount payable for an insured event and the amount set aside to support the claim. This figure is important for insurers since it represents how profitable the policy might be. The closer the accumulated reserve comes to the face value, the less the insurer will lose from paying out a claim in the full amount.

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