Which of the following best describes 'risk management' in insurance?

The definition of 'risk management' in insurance encompasses the identification, assessment, and prioritization of risks, which are integral steps in the process of minimizing or controlling them. This approach is vital in the insurance industry as it allows insurers to proactively manage potential risks that could affect their policyholders and their own financial stability.

By systematically identifying risks, insurers can evaluate the likelihood and potential impact of these risks, allowing them to prioritize their response strategies effectively. The coordinated efforts that follow can include implementing measures such as policy exclusions, coverage limits, and preventive measures to mitigate risks before they result in claims.

This comprehensive approach not only protects the interests of the insurance company but also enhances the security of the insured parties by ensuring that potential risks are proactively addressed. Therefore, option B accurately captures the essence of risk management by articulating the critical processes involved in effectively managing risks within the scope of insurance.