Week 6 Essay question Flashcards
What is essay 6 and where is it?
Risk management in insurance and is at glen mark
What does essay 6 talk about
Intro
Brief history of insurance/ risk management
3 modern steps of risk management
(risk identification, risk control and risk financing)
Advantages and disadvantages of insurance
(try talk about 4-5 each)
alternatives for large orginizations
((mention how its really risk financing))
(Derivatives, contractual risk trasnfer, captive insurance and retention: self insurance)
Risk analysis
(Heinrich’s model and TARA model)
Conclusion
What might you talk about in the history of insurance?
Before, insurance would only insure pure risks such as accidents, however this changed and insurance evolved after the Second World War. The 1980s liability crisis in the USA paved way for new and alternative ways to value and insure new and evolving risks.
What might you talk about in risk identification, risk control and risk financing?
Risk identification (First spotting the risk whether that is a risk the insurer has taken or is about to take, this can be done in many ways such as inspecting via drone for example possible volcanoes that explode if they insure natural disasters)
Risk Control YOU CAN ALSO TALK ABOUT PROACTIVE AND REACTIVE MEASURES (Insurers after identifying a possible risk will want to consider how much risk they are willing to take and implement measures which help avoid risk such as smoke detectors in houses avoid fires more likely)
Risk financing (Insurers once knowing the risk that they are looking at and have implemented some type of control will look at financially how much they may charge or be prepared to lose in a potential claim.
What would you mention about reactive measures?
After the loss has been reported, insurers should do their best to minimise the potential loss and attempt to avoid claims leakage.
