A whole range of benefits flow from this primary function of risk transfer and these are detailed later.
Before moving on to examine each one in detail there are two other functions which we should look at: the common pool and equitable premiums.
In one sense, we could say that the common pool and equitable premiums represent the way in which the main function of risk transfer is provided.
However, the provision of a risk transfer mechanism could be made without the need for either a common pool or equitable premiums, and so they are functions in their own right.