What is the primary means of managing risk in insurance?

The primary means of managing risk in insurance encompasses various strategies, including transferring, retaining, and avoiding risk. In the context of insurance, transferring risk is fundamental. This involves the policyholder transferring the financial burden of a potential loss to the insurance company through the payment of premiums.

Retention of risk means that individuals or businesses accept the possibility of loss and may choose to manage small losses internally without insurance. Avoidance of risk entails taking steps to eliminate the possibilities of loss entirely; for example, a business might stop a high-risk operation altogether to avoid related insurance claims.

By integrating these methods, risk management becomes more effective as it allows for a balanced approach tailored to an individual's or organization's circumstances. Thus, all these strategies are essential components of risk management in the insurance context, making 'all of the above' the correct and comprehensive answer.