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    M6 Activity 1 Case Application

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    Jay Mariz C. Ramirez
    The risk manager of City Bus should follow these steps in the risk management process: 1) Identify potential losses, 2) Measure and analyze the frequency and severity of losses, 3) Select techniques to treat exposures such as risk control and financing, 4) Implement and monitor the risk management program. Major exposures include business losses from competition, property damage to garages and buses, liability from accidents, and crime losses from theft. Exposures can be handled using risk control techniques like loss prevention and reduction, and risk financing techniques like retention and insurance. Sources of funds for retention include current net income, lines of credit, and funded or unfunded reserves. Other involved departments are Production for maintenance and quality control, and Accounting and Finance

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    M6 Activity 1 Case Application

    Uploaded by

    Jay Mariz C. Ramirez
    2K views2 pages
    The risk manager of City Bus should follow these steps in the risk management process: 1) Identify potential losses, 2) Measure and analyze the frequency and severity of losses, 3) Select techniques to treat exposures such as risk control and financing, 4) Implement and monitor the risk management program. Major exposures include business losses from competition, property damage to garages and buses, liability from accidents, and crime losses from theft. Exposures can be handled using risk control techniques like loss prevention and reduction, and risk financing techniques like retention and insurance. Sources of funds for retention include current net income, lines of credit, and funded or unfunded reserves. Other involved departments are Production for maintenance and quality control, and Accounting and Finance

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    The risk manager of City Bus should follow these steps in the risk management process: 1) Identify potential losses, 2) Measure and analyze the frequency and severity of losses, 3) Select techniques to treat exposures such as risk control and financing, 4) Implement and monitor the risk management program. Major exposures include business losses from competition, property damage to garages and buses, liability from accidents, and crime losses from theft. Exposures can be handled using risk control techniques like loss prevention and reduction, and risk financing techniques like retention and insurance. Sources of funds for retention include current net income, lines of credit, and funded or unfunded reserves. Other involved departments are Production for maintenance and quality control, and Accounting and Finance

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views2 pages

    M6 Activity 1 Case Application

    Uploaded by

    Jay Mariz C. Ramirez
    The risk manager of City Bus should follow these steps in the risk management process: 1) Identify potential losses, 2) Measure and analyze the frequency and severity of losses, 3) Select techniques to treat exposures such as risk control and financing, 4) Implement and monitor the risk management program. Major exposures include business losses from competition, property damage to garages and buses, liability from accidents, and crime losses from theft. Exposures can be handled using risk control techniques like loss prevention and reduction, and risk financing techniques like retention and insurance. Sources of funds for retention include current net income, lines of credit, and funded or unfunded reserves. Other involved departments are Production for maintenance and quality control, and Accounting and Finance

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    M6 Activity 1: Case Application

    1. Briefly describe the steps in the risk management process that should be followed by the
    risk manager of City Bus.

     Identify Loss Exposures – it involves a painstaking review of all potential losses

     Measure and Analyze the Loss Exposure- it includes determining the loss
    frequency, and loss severity of each loss, and determining the maximum possible
    loss and the probable maximum loss

     Select the Appropriate Combination of Techniques for Treating the Loss


    Exposures- it utilize risk control which the techniques is to reduce the frequency
    or severity of the losses and it also utilize the financing risk which the techniques
    provides the funding of the losses

     Implement and Monitor the Risk Management Program- it have a risk


    management policy statement and a risk management manual, and it ensure that
    everyone that is involved in a company is aware of these regulations and policies

    2. Identify the major loss exposure faced by City Bus.

     Business Loss Exposure - Since the firm faces competition from two larger bus
    companies that operate in the same area, with that the City Bus will have a
    business income loss exposure
     Property Loss Exposure – the City Bus face a damage to any three garages and
    will encounter a damage in any 50 buses and have a mechanical issues
     Liability Loss Exposure – the City Bus might face traffic accidents with the
    buses
     Crime Loss Exposure – the City Bus might face a loss when it comes to theft in
    garages or buses or even with driver of the bus

    3. Then identified in (b) identify a risk management technique or combination of techniques


    that could be used to handle the exposure.

    The following is a risk management technique that the City Bus could be used to handle
    the exposure:
       Risk Control
     Loss Prevention
     Loss Reduction
     Risk Financing
     Retention
     Insurance

    4. Describe several sources of funds for paying losses if retention is used in the risk
    management program.

     Current Net Income- the City Bus Corporation can pay losses out its net income
     Line of Credit- the City Bus can apply for a line of credit and can use the line of
    credit from a bank or any financial institutions that can pay the losses incurred
     Funded or unfunded reserves- the City Bus can establish an unfunded reserve
    wherein it is responsible for taking losses into budget and will pay out by the net
    income, or the City Bus may set aside a funded reserve for expected and
    unexpected losses

    5. Identify other departments in City Bus that would also be involved in the risk
    management program.

     Production Department- it involves with the maintenance of the buses and


    provide quality control of the parts for the buses
     Accounting and Finance Department- it provides information on insurance and
    the taxes of funds, it ensure that the budgets and profits is lineup, and they can be
    able to calculate the outcome losses on City Bus Corporation’s income

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