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Chapter Three: Introduction to Risk Management - Coggle Diagram
Chapter Three: Introduction to Risk Management
Meaning of Risk Management
Objectives of Risk Management
Pre loss Objectives
Economy goal
Reduction of anxiety
Meet any legal obligations
Post loss Objectives
Survival of the firm
Continued operation
Stability of earnings
Continued growth
Social responsibility
Risk Management Process
Identify the Loss Exposures
important loss exposures
a. Property loss exposures
b. Liability loss exposures
c. Business income loss exposures
d. Human resources loss exposures
e. Crime loss exposures
f. Employee benefits loss exposures
Foreign loss exposure
intangible property loss exposures
Failure to comply with government laws and regulations
sources of information for identifying loss exposures
a. Risk analysis questionnaires
b. Physical inspection
c. Flow charts
d. Financial statements
e. Historical loss data
Measure and Analyze the Loss Exposures
Two concepts
a. Loss frequency
b. Loss severity
Guidelines for measuring severity
a. Maximum possible loss
b. Probable maximum loss
Select the Appropriate Combination of Techniques for Treating the Loss Exposures
Risk control
a. Avoidance
b. Loss prevention
c. Loss reduction
Risk financing
Retention
(1) Determining retention levels
(2) Paying losses
(3) Captive insurer
(4) Income tax treatment of captives
(5) Self-insurance
(6) Risk retention groups
(7) Advantages and disadvantages of retention
noninsurance transfers
Commercial insurance
1) Advantages of insurance
(2) Disadvantages of insurance
Which technique should be used?
Implement and Monitor the Risk Management Program
Policy statement
Cooperation with other departments
Periodic review
Personal Risk Management