Page 43 - RISK Management IC86 Ebook
P. 43
The Insurance Times
machines in the section have increased, an appropriate
correction needs to be done in the statistics.
iii. OTHER EXPOSURE FACTORS - If, after the passage
of time, there is change in legislation or change in
insurance coverage, a new pattern will emerge requiring
adjustment.
Major limitations of the statistical method are- :
l Statistics may not cover all data needed,
l It mainly measures backwards,
l Open to manipulations,
l Statistical co-relation does not imply causation and
l Danger of ignoring dispersion.
Assessment of risk exposures
l Once risks have been identified, the next logical step in
risk management is assessment. It measures the probability
of an identified risk actually taking place, as well as the
amount of loss that would be suffered were the risk to
actually occur. There are four main types of exposures as
under:
n Physical assets exposures - e.g. motor vehicles
n Financial assets exposures - e.g. money, share certificates
Website: www.bimabazaar.com Call: 033-22184184 / 40078428 44
Copyright@ The Insurance Times. 09883398055 / 09883380339
