What is the second objective of risk management?

The second objective of risk management focuses on providing a framework for an organization to access various risk transfer mechanisms effectively, such as the reinsurance market. Through reinsurance, a primary insurer can mitigate potential losses by redistributing risk, allowing them to maintain stability and adequately support their operations.

By securing direct access to the reinsurance market, an organization ensures it can manage its risk exposure more effectively, strengthening its financial position in the face of unforeseen events. This objective highlights the importance of having strategic partnerships with reinsurers, which can provide added security for the insurer and enable it to take on additional risks while maintaining solvency.

The other options do not specifically align with the core objectives of risk management as they pertain to different aspects of insurance operations, such as regulatory compliance, financing costs, or operational cash management. Each of these elements is certainly relevant in the broader context of risk management but does not serve as a central objective in the same manner that accessing the reinsurance market does.