Rmin 4000 ch 3
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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| Risk Management | show 🗑
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| Loss Exposure: | show 🗑
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| show | 1. Identify loss exposures.
2. Measure and analyze the loss exposures.
3. Consider and select the appropriate risk management techniques.
4. Implement and monitor the chosen techniques.
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| 1. Identify loss exposures. | show 🗑
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| 2. Measure and analyze the loss exposures. | show 🗑
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| show | the worst loss that could happen to the firm during its lifetime.
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| show | the worst loss that is likely to happen.
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| Risk Control: | show 🗑
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| show | techniques that provide for the funding of losses.
- Retention, noninsurance transfer, insurance
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| 4. Implement and monitor the chosen techniques. | show 🗑
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| Avoidance | show 🗑
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| Loss prevention | show 🗑
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| Loss reduction | show 🗑
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| show | having back-ups or copies of important documents or property available in case a loss occurs.
Can affect severity and frequency
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| Separation | show 🗑
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| show | reducing the chance of loss by spreading the loss exposure across parties (customers, suppliers), securities (stocks, bonds), or transactions.
Ex: Multiple suppliers, sources, products, stocks
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| Retention (Deductible) | show 🗑
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| Retention level | show 🗑
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| show | it is difficult to insure,
Worst possible losses are not serious (low severity),
Losses are predictable (high frequency)
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| show | Save on loss costs,
Save on expenses,
Encourage loss prevention,
Increase cash flow,
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| show | Possible higher losses,
Possible higher expenses,
Possible higher taxes
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| show | unplanned, low cost and frequency, don’t have money set aside
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| Funded Reserve | show 🗑
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| show | insurer owned by a parent firm for the purpose of insuring the parent firm's loss exposures (only purpose is to insures the main company's loss, keep in-house insurance).
Single-parent captive is owned by only one parent.
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| Captive Insurer Advantages: | show 🗑
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| Self-Insurance: | show 🗑
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| show | group captive that can write any type of specific liability coverage except employers' liability, workers compensation.
Collect money from a group of people, and pays out if someone needs it
Ex: medical liability from doctors being sued
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| show | methods other than insurance by which a pure risk and its potential financial consequences are transferred to another party.
Ex: contracts, leases, hold-harmless agreements
Ex: bungee jumping life waver, housing contracts
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| show | Can transfer some losses that are not insurable.
Less expensive,
Can transfer loss to someone who is in a better position to control losses,
Sometimes insurance don't cover certain losses
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| show | Contract language may be ambiguous, so transfer may fail.
If the other party fails to pay, firm is still responsible for the loss.
Insurers may not give credit for transfers
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| show | appropriate for low-frequency, high-severity loss exposures.
1. Selection of insurance coverages and an insurer.
2. Negotiation of terms.
3. Dissemination of information concerning insurance coverages.
4. Periodic review of the insurance program
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| Excess insurance: | show 🗑
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| Manuscript policy | show 🗑
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| Insurance Advantages: | show 🗑
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| Insurance Disadvantages: | show 🗑
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| Hard Market | show 🗑
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| Soft Market | show 🗑
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Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
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Created by:
aychan
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