What are the benefits and costs associated with the separation technique in risk management? Benefits: Limits loss size; Costs: Multiple losses Benefits: Reduces severity; Costs: Higher expenses Benefits: Simplifies management; Costs: Reduced efficiency Benefits: Reduces frequency; Costs: Increased complexity

Benefits: Limits loss size; Costs: Multiple losses

Risk Management Techniques: Control Methods, Loss Avoidance, and Financial Strategies

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michael1tekrzp Created by 10 mon ago

Cards in this deck(37)

What is the primary goal of conducting activities to control risk?

What is the term for stopping engagement in an activity that causes loss?

What is the approach called that seeks to avoid a loss exposure before it exists?

Which risk control technique aims to reduce the frequency of a particular loss?

Which risk control technique is used to reduce the severity of a particular loss?

What is the technique called where items, activities, or responsibilities are broken into smaller parts and separated?

What are the benefits and costs associated with the separation technique in risk management?

What is the risk management technique where key assets or responsibilities are replicated and held in reserve?

What is the process of seeking funds from unrelated third parties to pay for losses called?

What is it called when a firm retains part or all of the losses that can result from a given loss?

What is the term for knowingly retaining loss exposures?

What is the term for being unaware of retaining loss exposures?

What is it called when a firm sets aside funds every period to pay for losses?

What is the retention method where no separate fund is set aside to pay for losses?

What is the term for a dollar amount specified in an insurance policy that the insured must pay before the insurer will make any payment for a claim?

What is the special form of planned retention where part or all of a given loss exposure is retained by the firm?

How can insurers minimize risk and set premiums according to market demand?

What are wholly owned subsidiaries or groups of entities created to provide insurance to those entities called?

What is a group-owned insurer that primarily assumes and spreads the liability-related risks of its members?

What is an insurer owned by only one parent, such as a corporation, called?

What is the term for captives formed by a group of companies in the same industry?

What decision-making process involves choosing risk management options based on the frequency and severity of loss exposures?

What is the premium that is equal to the expected loss amount, usually smaller than the premium charged by insurers?

What is the cost associated with decision-making, including the cost of anxiety concerning a decision?

What condition presents the possibility of sustaining a loss from damage to property in which a person or organization has a financial interest?

Who are creditors that have their loans leveraged on some asset of the company they're loaning to?

What are the different types of legal interest in property?

Who is the party that acquires possession, but not the title, of personal property under an agreement?

What is the possibility of a liability loss caused by a party considered at fault, who may be sued and have to defend against a lawsuit?

What condition presents the possibility of loss caused by a reduction in net income, often due to business interruption?

What type of loss exposure occurs when a firm has a key employee who suffers a personal loss, such as death or disability?

What is the special case where the trigger event is the same personnel loss from net income loss exposures?

What type of risk involves traditional risk management types like property and liability, managed by risk managers?

What type of risk arises from day-to-day operations, such as supply chain and customer service, and is managed by the COO?

What type of risk arises from changing financial market conditions and is associated with an organization's financial activities?

What type of risk arises from management decisions and is considered by the CEO or board?

How do TRM and ERM differ in their approach to managing risks?

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