Karteikarten
Ohne Titel
Karten in diesem Stapel (55)
- 1Pure RiskEvents that can only produce a loss
(If it doesn't happen, nothing changes)
(ex. hurricane is coming, could destroy your store, but the hurricane could turn direction and never come) - 2Probability of a lossOdds
Ranges from 0-1/0-100% - 3Pure V. Speculative Risk-Both Involve uncertainty
-The difference is in the outcomes - 4Speculative Risk3 things than can occur: Gain, Lose, Stay the same.
(ex. Gambling, buying stock)
-Basis for enterprise risk management (ERM) - 5Static RiskSituation not significantly affected by the business environment and remains constant over time
(ex. weather, car accidents)
Static risks are insurable. - 6Dynamic RiskExposure to loss from changes in environment of the business.
(ex. fashion trends, people's tastes, regulations)
(ex. blockbuster went out of business because of things like netflix, movie streaming. - 7Subjective RiskA persons view of uncertainty or a situation involving a risk
(not easy to measure or compare)
(Some people are scared to travel on an airplane some aren't because they view the risk of a crash differently) - 8Objective RiskThe measure in variation of uncertain outcomes because of facts.
- 9Financial Consequences of RiskAn organization considers all of its components and estimates financial consequences to better determine where to focus risk management
- 10Cost of residual uncertaintylevel of risk that remains after individuals or organizations implement their risk management plan
- 11Moral HazardA person acts differently because of insurance
Fraud and dishonesty
Presence of insurance = change in behavior - 12Morale HazardCarelessness concerning losses
(leaving car unlocked hoping it gets stolen so that you can claim insurance money and get a new one) - 13Financial Consequences of Risk and the Burden of Risk1- Expected cost of loss
2- Cost to manage/Risk mgmt. expenditures
3- Residual uncertainty - 14Risk Management ProcessManage pure and speculative risks
Goal is to minimize the financial impact on organizations - 15Risk ManagementSpecialized branch of financial management
-Finance dpt (small)
-Risk manager (medium)
-Chief Risk Officer (Large) - 161950's FirmsDidn't manage risk, just bought insurance
- 171960'sWayne Snider (Temple) coined the term Risk Management in book that he contributed to, after that it became a strategy
- 18Steps in the risk process1- Identify exposures to loss
2- Evaluate exposures to loss
3- Identify possible alternatives
4- Select among the alternatives
5- Implement of chosen option
6- Re-evaluate periodically the chosen strategies - 19Identify loss exposures (Step 1 in process)The possibility of a financial loss that a particular entity faces as the result of peril striking a thing of value.
- 20How to identify exposures1- inspection of plant and facilities (walk arounds)
2- contract analysis
3- Look at past info
4- Share loss info w/ other similar firms through trade associations
5- Checklists/standardized surveys from insurance companies
6- Flow chart approach
7- Ask employees or managers in the firm
8- Financial statement approach - 21Types of loss exposuresProperty
Net Income
Personnel
Liability - 22Property Loss Exposure Real PropertyLand
Buildings - 23Property Loss Exposure Personal PropertyTangible- Equipment, furniture, clothes
Intangible- Goodwill, patent, trademark - 24Ownership InterestMost common type of interest
Can have present or future ownership interest
Possession of equity in the capital (stocks) - 25FOB Point"Free on board" point. The point when ownership transfers.
(ex. you ship something using FedEx, post in description that you aren't responsible for shipping damages. That is the FOB point) - 26Bailee InterestAn entity who receives property from another under a contract of bailment
(ex. renting a car) - 27Tennent InterestResponsibility to return property in reasonable condition
- 28Net Income Loss Exposures (Business Interruption)A firm suffers a primary loss- As a result of that they also suffer a secondary loss that results indirect expenses
(decrease in revenue, increase in expenses, impact the bottom line/net income) - 29Net Income Loss Exposures (Business Interruption)Damage to property
-Key supplier has a property loss
-Power or telephone loss - 30Net Income Loss Exposures (Business Interruption)Personnel loss exposures
-A firm has a key employee who suffers a personal loss - 31Liability loss exposure-Lawsuits
Legal liability is established when there was negligence or actual damages/losses - 32NegligenceFailure of person to exercise the proper degree of care
- 33Absolute/Strict LiabilityImposition of liability on a party without a finding of fault. Only need to prove what happened and that the person was responsible
- 34Measurement of LossesProperty Losses
-Simple to calculate - 35Measurement of LossesBodily Injury
-Special damages
-Compensate for measurable losses
-Medical expenses
-Loss of income
-Easier to calculate - 36Measurement of LossesGeneral Damages
-Compensate for intangible loss
-Pain and suffering
-Mental anguish
-Difficult to estimate and measure - 37Measurement of LossesPunitive Damages
-Amounts assessed as form of punishment
-Gross negligence is involved
-Difficult to estimate and measure - 38Defenses to Liability-Assumption of risk by injured party
-Comparative/Contributory negligence - 39Res Ipsa Loquitur "The thing speaks for itself"Modification to law of negligence
-Presumption of negligence on part of defendant
-Not strict liability
-Fact of an injury is sometimes enough (normally wouldn't occur unless negligence, defendant exclusively controls the tool/equip) - 40Vicarious LiabilityOne person become legally liable for the negligent behavior of another
- 41Joint and several LiabilityNegligence of two or more parties
-Injured party may recover the entire amount of compensation from any negligent party who is able to pay - 42Product LiabilityManufacturers of a faulty product that injures someone or damages property may be held legally liable
- 43Premises LiabilityOwner or tenant may be held liable for damages if someone is injured
- 44Trespasser (Premises Liability)Obligated to abstain from doing intentional harm
- 45Licensee (Premises Liability)Comes on to property with your knowledge
- 46Social Guest/Invitee (Premises Liability)A person who is invited to your proptery
- 47Animal LiabilityExotic animals = always strict liability
If your dog can kill=strict liability - 48Enterprise Risk Management ERMManage risk and seize opportunity
-Risk based approach to managing an enterprise - 49Hazard RiskFire
Flood
Lawsuits - 50Financial RiskPrices
Volatility
Liquidity
Credit - 51Operational RisksManufacturing products
-Supply chain issues
-Service provider failures
-System failure
-Product recall
Regulatory Issues - 52Strategic or Business Risk-Customer service issues
-Public relations
-Competition
-Ethical issues
-Social trends - 53Total Risk Mgmt TRMFocuses mainly on hazard type risks, departmentalized approach
- 54Enterprise Risk Management ERMIntegrated approach, occurs at enterprise level instead of individual departments
- 55TRM v. ERM
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- 1 Risk Karteikarten am Ohne Titel, erstellt von zick2 am 08/02/2016.
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