What is the term for the way in which clients manage their own risk without insurance?

The term that accurately describes how clients manage their own risk without the use of insurance is self insurance. This practice involves setting aside funds to cover potential losses instead of paying premiums to an insurance company. Clients who engage in self insurance typically assess their own risk exposure and decide to retain the financial responsibility for certain types of losses. This can be a strategic choice, especially for organizations that are confident in their ability to predict and manage their own risk.

Self insurance allows for greater control over risk management and can lead to cost savings if the estimated losses fall below the costs associated with traditional insurance premiums. Moreover, this approach can be particularly beneficial for managing risks that are predictable and quantifiable over time.

In contrast, risk transfer involves passing the risk to another party, generally through the purchase of insurance policies, which is not the focus in this scenario. Risk retention refers to the acceptance of risk by the individual or business and does not necessarily imply an organized approach of setting aside funds, while partial self insurance likely involves a combination of retaining some risk while also purchasing insurance for larger risks—this term doesn't fully represent the concept of managing all risk independently. Thus, self insurance clearly aligns with the concept of clients managing risk on their own without relying on external insurance.