Risk Management Essay Example | Topics and Well Written Essays - 1250 words

pretend Management - Essay Example14,040. b) Total indirect (uninsured) muddled time apoplexy costs = 36*650 = ? 23,400. c) The indirect (uninsured) cost of non lost time accidents =12*630 = ? 7,560. d) The complete costs of injury accidents = 7,560 + ? 23,400 = ? 30,960. e) The cost of injury accidents per employee = 30.960/633 = ? 49. f) The total cost of damage accidents = 2500*85 = ? 212,500. g) The total accident costs for XYZ factory = 7560 + 212,500 + 23,400 =? 243,460. h) The average accident cost = 243,460/3 = ? 81,153. i) The average accident cost per employee = 243,460/633 =? 385. 2. fortune distribution of damage for an airplane Notes It can be observed from the diagram above that the luck of item of damage increases up to a certain maximum value and then falls drastically to zero. The probability of damage can be determined at contrasting damage levels. The mean, median and the 90th centile level of damage can be obtained. The 90th percentile represents the highe st possible damage evaluate. 3. Principles of portfolio theory supportive correlation principle- this principle applies when the investment takes a positive move. For instance, in foreign exchange the upward or downward movement of two or more assets secernatees indicates a positive correlation. Investing in class of items that has high positive correlation helps in reduction of risk. ... To manage risk negative correlation implies that furcate of your investments may retain their value or improve while the rest deteriorates in value. The risk is governable since one investment loses and the other gains. 4. Main elements of indemnity premiums The amount of money paid in an insurance policy (premium) depends on the following elements. 1) In leaned use- the amount of premium paid will vary depending on the use of the commodity insured. For instance, a private car and a public car require different premiums. 2) Mortality charges- Charges use to cover the eventuality on an individ ual. Many companies, belief that young men stir a large number of accidents hence, they charge them high premiums. 3) Saving component- Some of the premium paid is used for reinvestment in order to generate returns which the policy h centenarianer receives in terms of bonuses or maturity amount. 4) geographical localization principle- People who live in densely populated areas that have high traffic density tend to pay higher premiums. In these areas, the incidences of losses are more pronounced. 5. Influences of the following factors on elements of premiums A. The insured expected losses When the level of loss expected is high, then the amount of premium to be paid is alike high. Mortality charges will increase with the age of the insured since the expectation of death is high in old age. B. Potential variation around the insureds expected loss Changes in geographical location and age are associated with increased vulnerability to loss. These changes may imply an increase in pr emium to the insured. C. Risk sharing arrangement between the insured and the insurer. Sharing of risks between the insured and the insurer implies payment