Ic01 1
Ic01 1
Ic01 1
Risk-Management
CB CB Life Insurance Company Ltd.
Life Insurance Company Ltd.
Learning Outcomes
1. Understand the meaning of risk and distinguish between different types of risks
Page 2 CB Life Insurance Company Ltd.
1. Understand the meaning of
risk and distinguish between
different types of risks
CB Life Insurance Company Ltd.
CB Life Insurance Company Ltd.
1. Understand the meaning of risk and distinguish
between different types of risk (1)
Note
Uncertainty of outcome
Note
Insurance only covers risks where the possibility of occurrence is uncertain.
Page 5 CB Life Insurance Company Ltd.
1. Understand the meaning of risk and distinguish
between different types of risk (3)
1. Catastrophic
Risks and
Important Risks
5. Fundamental 2. Financial
Risks and Risks and Non-
Particular Risks Financial Risks
5 Board
Categories
of risks
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1. Understand the meaning of risk and distinguish
between different types of risk (4)
Page 7 CB Life Insurance Company Ltd.
1. Understand the meaning of risk and distinguish
between different types of risk (5)
Page 9 CB Life Insurance Company Ltd.
1. Understand the meaning of risk and distinguish
between different types of risk (7)
Hazards
Accelerate perils
Increases the chances of loss
Physical • Characteristic & qualities of the subject matter which is proposed to be insured
Hazard • Eg. Smoking, Inflammable material like oil, fire crackers, loose wiring, open live wires
Moral • Character of the person who is approaching the insurance company for insurance
Hazard • Eg. Dishonesty of individuals, Mala fide intention
Page 10 CB Life Insurance Company Ltd.
2. Understand risk-analysis and
risk-management techniques
CB Life Insurance Company Ltd.
CB Life Insurance Company Ltd.
2. Understand risk-analysis and
risk-management techniques (1)
Page 12 CB Life Insurance Company Ltd.
2. Understand risk-analysis and
risk-management techniques (2)
1. Separation
• Isolating subjects exposed to the same risk
• Keeping inventories in different places
• Carriers of goods separating cargo which may ignite or contaminate
2. Duplication
• Keeping backup copies
3. Diversification
• Spreading risks across areas which may not be affected equally or at the same time
i. Diversification in business - Making products that are in demand at different times
- Making products for different markets
ii. Diversification in Investments - not investing all funds in one company
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2. Understand risk-analysis and
risk-management techniques (3)
Page 14 CB Life Insurance Company Ltd.
2. Understand risk-analysis and
risk-management techniques (4)
Actual Loss
1. Repair or Replacement or Reinstatement Loss
2. Consequential Losses
• Expenses for cleaning up and removal of debris
• Loss of rent, production, profits until normalcy is restored
• Possible liability losses for third party injuries
Page 15 CB Life Insurance Company Ltd.
CB CB Life Insurance Company Ltd.
Life Insurance Company Ltd.