CISR Elements of Risk Management (EORM) Lesson 1 Topics A & B Exam,100% CORRECT

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CISR Elements of Risk Management (EORM) Lesson 1 Topics A & B Exam Risk control - CORRECT ANSWER An action step of risk management Financing - CORRECT ANSWER Obtaining insurance to pay for Wokers ... Comp losses illustrates a step of the risk management process Identification - CORRECT ANSWER The step of the risk management process where a risk manager reviews accident reports in order to determine the organizations exposures. Risk analysis - CORRECT ANSWER Using industry data to determine a baseline for performance is an activity related to this risk management process step Risk Management Process - CORRECT ANSWER Risk identification, risk analysis, risk control, risk finance, risk administration Marketing costs - CORRECT ANSWER Not included as a component in an organization's cost of risk Minimizing liabilities - CORRECT ANSWER Not a part of the definition of risk management Certainty concerning a loss - CORRECT ANSWER Not a component in the definition of risk A company building's value reduced because of a fire is an example of what? - CORRECT ANSWER A loss What is a company vehicle an example of? - CORRECT ANSWER Exposure Severity - CORRECT ANSWER The dollar amount of a given loss or the aggregate dollar amount of all losses for a given period What control technique is designed to prevent a certain type of accident - CORRECT ANSWER A goal of reducing frequency Active retention - CORRECT ANSWER budgeting for losses Accident - CORRECT ANSWER An unplanned event definite as to time and place that results in injury or damage to a person or property Occurrence - CORRECT ANSWER An accident with limitation of time removed (an "accident" that is extended over a period of time rather than a single observable happening) Expected losses - CORRECT ANSWER Loss projections based on a probability distributions and statistics Incident - CORRECT ANSWER An event that disrupts normal activities and may become a loss Hazard - CORRECT ANSWER A condition that may give rise to a loss from a given peril; physical, moral, or morale characteristics that increases the likelihood of a loss. Peril - CORRECT ANSWER A condition that may give rise to a loss from a given peril; physical, moral, or morale characteristics that increases the likelihood of a loss Frequency - CORRECT ANSWER The number of losses occurring in a given time period Claim - CORRECT ANSWER A demand for payment or an obligation to pay as a result of a loss Loss - CORRECT ANSWER A reduction in the value of assets Exposure - CORRECT ANSWER A situation, practice, or condition that may lead to an adverse financial consequence; an activity or asset Define risk management - CORRECT ANSWER The process of protecting an organization's assets through exposure identification, exposure analysis, controlling exposures, financing losses with external and internal funds, and the implementation and monitoring of the risk management process. What are two primary responsibilities of risk managers? - CORRECT ANSWER 1. Protect the assets of the organization, and 2. Protect the financial health of the organization What does an effective risk management program identify? - CORRECT ANSWER 1. The assets the organization has exposed to loss and also 2. The events that could reduce the value of those assets. What is an organization's "Appetite" for Risk? - CORRECT ANSWER The amount of risk exposure the organization is willing to accept or retain. What are the five steps of the risk management process? - CORRECT ANSWER Identification, Analysis, Control, Financing, Administration Identification - CORRECT ANSWER The process of identifying and examining exposures of an organization. Example: A loss control specialist conducts a physical inspection at a job site. Analysis - CORRECT ANSWER The assessment of the potential impact of various exposures to an organization Example: A risk manager reviews loss data from slip-and-fall claims in order to predict future losses. Control - CORRECT ANSWER Any conscious action or inaction to minimize, at the optimal cost, the probability, frequency, severity, or unpredictability of loss. Example: Management institutes new machine safety training for all employees. Finance - CORRECT ANSWER The acquisition of internal and external funds to pay losses at the most favorable cost. Example: The company CFO budgets $250,000 for retained losses. Administration - CORRECT ANSWER The process of planning, implementing, and monitoring the risk management program. Example: The risk manager monitors the effectiveness of new safety equipment on injury claims. [Show More]

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