dr. james kallman, arm 5-1 advanced powerpoint presentation ©2009 the national underwriter company
Post on 30-Dec-2015
215 Views
Preview:
TRANSCRIPT
Dr. James Kallman, ARM 5-1
AdvancedPowerPointPresentation
©2009 The National Underwriter Company
Dr. James Kallman, ARM 5-2
This Advanced PowerPoint Presentation accompanies the “Tools & Techniques of Risk Management & Insurance” textbook. Each of the 28 chapters in the textbook are presented here in the following sections:
OutlineKey conceptsMajor sectionsChapter summary
©2009 The National Underwriter Company
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-3
Contents
Techniques of Risk Management & InsuranceCh 1 Introduction to Traditional Risk Management……………1-5
Ch 2 Enterprise Risk Management…………………………….2-1
Ch 3 Risk Assessment: Identification…………………………..3-1
Ch 4 Risk Assessment: Quantification…………………………4-1
Ch 5 Overview of Risk Treatment Alternatives………………. 5-1
Ch 6 Non-insurance Transfer of Risk…………………………. 6-1
Ch 7 Insurance as a Risk Transfer Mechanism……………….7-1
Ch 8 Overview of Alternative Risk Transfer Techniques……..8-1
Ch 9 Global Risk Management…………………………………9-1
Ch 10 Loss Control Techniques………………………………..10-1
Ch 11 Emergency Response Planning………………………..11-1
Ch 12 Business Continuity Planning…………………………..12-1
Ch 13 Claims Management……………………………………..13-1
Ch 14 Monitoring Claims for Financial Accuracy……………..14-1
Ch 15 Insurance Companies and Risk Management………..15-1
Ch 16 Working with an Agent or Broker……………………….16-1
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-4
Contents
Tools of Risk Management & Insurance
Ch 17 Commercial General Liability Insurance……………….17-1Ch 18 The Workers’ Compensation System………………….18-1Ch 19 Commercial Property Insurance………………………..19-1Ch 20 Directors and Officers’ Liability Insurance……………..20-1Ch 21 Employment-Related Practices Liability Insurance…..21-1Ch 22 Business Automobile Insurance………………………..22-1Ch 23 Crime Insurance………………………………………….23-1Ch 24 Capital Markets Risk Transfer Tools…………………..24-1Ch 25 Loss Control Tools……………………………………….25-1Ch 26 The Certificate of Insurance…………………………….26-1Ch 27 Surety Bonds……………………………………………..27-1Ch 28 Claim Reviews……………………………………………28-1
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-5
Chapter 5Overview of Risk Treatment Alternatives
Outline
• What is it?• The Options• Decreasing the Cost of Risk• Advantages and Disadvantages• Chapter Summary
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-6
Chapter 5Overview of Risk Treatment Alternatives
†
What is it?
• There are four fundamental risk financing treatment alternatives:
• Avoidance
• Non-insurance Transfer (contractual)
• Retention
• Insurance Transfer
• The above order reflects costs
• Selecting the best alternative is subjective
• Consider the risk philosophy
• Consider available assets
† - Chapter 10 Covers Loss Control Alternatives
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-7
Chapter 5Overview of Risk Treatment Alternatives
The Options
• Avoidance
• Perform a cost/benefit analysis
• Decide if the risk is worth the reward
• Non-insurance Transfer
• Using contracts to shift legal responsibility
• Examples:
• Hold Harmless agreement
• Indemnification agreement
• Additional Insured provision
• Lease
(Chapter 6 provides details of non-insurance contracts)
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-8
Chapter 5Overview of Risk Treatment Alternatives
The Options
• Retention
• Appropriate for small, frequent, predictable losses
• Techniques:
• Insurance policy deductible
• Pure captive
• Risk retention group
• rent-a-captive
• Insurance Transfer
• Consider all other options before using insurance• Insurance is expensive – 35% of premium O Overhead
• Use insurance to cover catastrophic losses
(Chapter 7 provides details of insurance contracts)
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-9
Chapter 5Overview of Risk Treatment Alternatives
The Options
Supplement
• Adding risk control measure
• Prevention• Reduction
• Risk control measures can be adopted for non-pecuniary
reasons
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-10
Chapter 5Overview of Risk Treatment Alternatives
The OptionsSupplement
Risk Management Solution Tree
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-11
Chapter 5Overview of Risk Treatment Alternatives
Decreasing the Cost of Risk
• Loss Prevention and Reduction
• Loss control decreases the cost of risk
• Retention provides the incentive for loss control
•Select a portfolio of the four risk
financing alternatives
• First use loss control
• Then balance the costs
of risk financing techniques
• Use fig. 5.1 to make risk
financing decisions
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-12
Chapter 5Overview of Risk Treatment Alternatives
Advantages and Disadvantages
+ Can create a complete risk management program
+ Prepares for hard market conditions
+ Enables flexible risk financing
- Requires time to analyze costs/benefits
- Advocating avoidance O loss of credibility
©2009 The National Underwriter Company Dr. James Kallman, ARM 5-13
Chapter 5Overview of Risk Treatment Alternatives
Chapter Summary
• What is it?4 Techniques to finance risksConsider the risk philosophy and available assets
• The OptionsAvoidance. Non-insurance Transfer, Retention, Insurance Transfer, Prevention, and Reduction
Decreasing the Cost of Risk
Use loss control to decrease risk financing costs
Select a portfolio of the four risk financing techniques
• Advantages and Disadvantages
Prepares a complete, flexible, program for any conditions
Requires time for analysis, use avoidance prudently
top related