RMIN 5100 Test 1

• 1. Identify risks (loss exposures)
• 2. Evaluate Risk (frequency v. severity)
• 3. Select the best techniques (not just insurance, but a variety)
• 4. Implement the techniques
• 5. Monitor the risk management program

• 1. Expected loss
• 2. Cost of loss financing
• 3. Cost of loss control
• 4. Internal risk reduction (diversification)
• 5. Residual uncertainty

a hazard in which a physical condition (such as speeding) can increase the severity or probability of a loss

action or attitudinal change occurs before the loss; refers to the (lack of) incentive for insureds to reduce activity that affects the likelihood of insurance claims

action or attitudinal change occurs after a loss; refers to the incentive for insureds to choose actions that affect the size of an insurance claim, given that the loss has already occurred

attitude or behavioral change; refers to the situation where an insurance policy affects an insured’s incentive to reduce insurable losses

• Use of Premiums
• Deductibles
• Conditional Clauses
• Accident Investigators