Insurance is a classic example of the risk sharing (also known as risk transfer) technique. This risk treatment option involves contractually shifting the financial consequences of a potential loss from one party (the insured) to another (the insurer). In exchange for a premium, the insurer agrees to bear the specified risk, pooling it with the risks of other policyholders. This mechanism does not eliminate or reduce the likelihood of the risk event itself but reallocates the financial burden, which is the core principle of risk sharing as defined within the ISO 31000 framework.

B. Reduction: This technique, also called risk mitigation, involves actions to decrease the probability or negative impact of a risk event, such as installing a fire suppression system. Insurance does not reduce the event's likelihood.

C. Retention: This technique involves knowingly and willingly accepting the loss or financial impact if a risk event occurs. Insurance is the opposite; it is a method to transfer financial responsibility, not retain it.

1. International Organization for Standardization (ISO). (2018). ISO 31000:2018 Risk management — Guidelines. Clause 6.5.2, "Selection of risk treatment options," explicitly lists "sharing the risk" as a primary option. The explanatory note for this option states that risk sharing involves "agreeing with another party or parties to bear or share the risk" and can be achieved through mechanisms including "contracts, insurance."

2. Leitch, M. (2010). ISO 31000:2009 The new international standard on risk management. Risk Management, 12(3), 162-181. In the section discussing risk treatment (p. 175), the paper outlines that risk sharing (or transfer) is a key strategy where a third party takes on the risk, with insurance being the most common form of this treatment.

3. University of Queensland. (n.d.). UQ Risk Management Framework. In its documentation aligning with ISO 31000, the university's risk treatment guidelines categorize "Transfer (Share)" as a control type, defining it as "transferring or sharing a risk with another party who is more willing or better equipped to manage it," and lists "insurance" as the primary example. (See Section: Risk Treatment and Controls).