How can risks be handled according to the provided concepts?

The handling of risks, particularly in the context of surplus lines insurance, encompasses a variety of strategies that aim to mitigate potential negative impacts. The correct choice emphasizes multiple approaches: sharing, transfer, avoidance, reducing, and retaining.

Sharing risks involves distributing the exposure among multiple parties, which can lessen the burden on any one entity. Transfer refers to shifting the financial responsibility for certain risks to another party, typically through insurance contracts. Avoidance is the strategy of removing the risk entirely by not engaging in the activity that creates it. Reducing involves taking proactive measures to lessen the likelihood or impact of a risk. Lastly, retaining means accepting the risk and preparing to manage its consequences internally.

This comprehensive approach to risk management integrates various methodologies rather than relying on a single strategy, making it essential for effectively addressing the complexities inherent in risk. The other options, while they might involve aspects of risk management, do not encompass the full spectrum of strategies as outlined in the correct answer.