Q.1.1 SIPs enable the insurer to manage losses in a structured manner through the following characteristics, risk transfer, risk spread/risk combination, aggregate limits, and commutation. Explain these characteristics. Q.1.2 What risk can a business face due to a supplier and what are the risk control steps that a business can put in place regarding its suppliers? Provide examples to illustrate your answer further. Q.1.3 Cost-of-risk is the sum of insurance costs; unreimbursed losses; risk control and loss prevention expenses; and administrative costs. Discuss administrative costs. Provide a practical example to explain administrative costs. Q.1.4 Apply the fundamental concepts included in the definition of enterprise risk management (ERM) to a business of your choosing.
Q.1.1 SIPs enable the insurer to manage losses in a structured manner through the following characteristics, risk transfer, risk spread/risk combination, aggregate limits, and commutation. Explain these characteristics. Q.1.2 What risk can a business face due to a supplier and what are the risk control steps that a business can put in place regarding its suppliers? Provide examples to illustrate your answer further. Q.1.3 Cost-of-risk is the sum of insurance costs; unreimbursed losses; risk control and loss prevention expenses; and administrative costs. Discuss administrative costs. Provide a practical example to explain administrative costs. Q.1.4 Apply the fundamental concepts included in the definition of enterprise risk management (ERM) to a business of your choosing.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Q.1.1 SIPs enable the insurer to manage losses in a structured manner through the following characteristics, risk transfer, risk spread/risk combination, aggregate limits, and commutation. Explain these characteristics.
Q.1.2 What risk can a business face due to a supplier and what are the risk control steps that a business can put in place regarding its suppliers? Provide examples to illustrate your answer further.
Q.1.3 Cost-of-risk is the sum of insurance costs; unreimbursed losses; risk control and loss prevention expenses; and administrative costs. Discuss administrative costs.
Provide a practical example to explain administrative costs.
Q.1.4 Apply the fundamental concepts included in the definition of enterprise risk management (ERM) to a business of your choosing.
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Step 1: Define risk management
VIEWStep 2: Explain the mentioned characteristics
VIEWStep 3: Explain the risks businesses face due to a supplier and its control steps with examples
VIEWStep 4: Explain the risks businesses face due to a supplier and its control steps with examples
VIEWStep 5: Explain administrative costs and their examples
VIEWStep 6: Explain administrative costs and their examples
VIEWStep 7: Explain concepts in ERM related to a business of choosing
VIEWStep 8: Explain concepts in ERM related to a business of choosing
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