1. Chapter 25 Introduction to Risk Management
MYPF CHAPTER 25
13-SEPT-2001
Chapter 25 Introduction to Risk Management
What Is Insurance?
Risk Management
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2. Lesson 25.1 What Is Insurance?
Explain the concept of insurance.
Define basic insurance terminology and types of risk.
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3. Spreading the Risk
Insurance is a method for spreading individual risk among a large group of people to make losses more affordable for all.
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4. Insurance Terminology
Actuarial table
Actuary
Beneficiary
Benefits
Cash value
Claim
Coverage
Deductible
Exclusions
Face amount
Grace period
Hazard
Insurance agent
Insured
Loss
Peril
Proof of loss
Standard policy
Unearned premium
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5. Insurable Risks Personal risks Property risks Liability risks
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6. Lesson 25.2 Risk Management
Discuss the risk-management process.
Explain how to create a risk-management plan.
Discuss ways to reduce the costs of insurance.
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7. Risk-Management Process
Step 1: Identify risks of loss
Pure risk
Speculative risk
Step 2: Assess seriousness of risks
Step 3: Handle risks
Risk avoidance
Risk reduction
Risk assumption
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8. Making a Risk-Management Plan
List identified risks.
List assessment of risks’ financial impact.
List techniques to manage each risk.
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9. Reducing Insurance Costs
Increase deductibles.
Purchase group insurance.
Consider payment options.
Look for discount opportunities.
Comparison shop.
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