Which of the following methods of addressing risk is most associated with insurance?

Transference is the method of addressing risk that is most closely associated with insurance. This approach involves shifting the responsibility for managing a risk to another party, typically through mechanisms like insurance policies. By purchasing insurance, an organization can transfer the financial consequences of certain risks to the insurance provider, thus mitigating the potential impact on its own financial resources.

This method is effective because it allows organizations to engage in their activities without bearing the full financial burden of unexpected losses or adverse events. Insurance companies pool the risk from multiple clients, enabling them to manage large risks more effectively than individual organizations might be able to.

In contrast, avoidance focuses on eliminating the risk entirely, which may not always be feasible or practical. Acceptance involves acknowledging the risk and deciding to proceed without taking further steps, which can lead to significant consequences if the risk materializes. Mitigation is about reducing the impact or likelihood of a risk but does not involve transferring responsibility to another party.