Page 61 - RISK Management IC86 Ebook
P. 61
The Insurance Times
This would need forecasts of
a) Frequency & severity of expected losses,
b) Effects of various techniques on frequency, severity and
predictability of the projected losses,
c) Cost of such techniques.
l Defining and applying criteria to measure how well each
technique contributes to each objective in a cost
effective way.
n The selection criteria will relate to either financial objectives
or other objectives. The criteria should also take into
consideration:
l Effectiveness - this means capable of achieving desired
goals,
l Feasibility - the balance between the risk & convenience
of implementing risk treatment
l Cost-Effectiveness - the balance between the risk and
the cost of implementing the risk treatment option
n Financial Objectives based technique selection will focus on
maximising cash flows and profits generated by the activities.
Though risk control measures reduce cash outflows by reducing
losses, they at the same time need cash outflows towards
installing and maintaining safety devices and safety programmes.
Website: www.bimabazaar.com Call: 033-22184184 / 40078428 62
Copyright@ The Insurance Times. 09883398055 / 09883380339
