Learning Guide Week 1 Chapters 1, 2, and 3 Risk Management Name: ____________________ Date________________

1. 2. 3. 4. 5. List the six steps in the risk management process. Describe how hazard risk differs from business risk Explain why risk management is an ongoing process. Describe the four categories of risk used by some enterprise risk management models. Using the enterprise risk management model described in chapter one, categorize and identify the following risks: Cost of materials increases Regulatory sanctions block the launch of a new product Securities and Exchange Commission investigate accounting practices Computer hackers steal confidential information Competitor hires key employees Customer files for bankruptcy Some consumers experience an allergic reaction Manufacturing facilities in Iraq are threatened by insurgents United States dollar falls against the euro making the organizations debt more expensive to pay Union calls for a sick-out Merger plans fall through Pollution Credit ratings reduced by a credit rating agency resulting in increased cost of borrowing

6. Identify the three broad categories of costs imposed by accidental losses: 7. Describe six post-loss goals of a risk management program. 8. Identify the types of information that might be communicated into and out of an organizations risk management department. 9. Identify the risks the risk management professional must complete in an organizations risk financing program. 10. Identify the four generic categories of risk management professionals duties that are usually not delegated to others. 11. Describe three results that may occur when actual performance is compared with performance standards 12. What conclusions might be drawn when performance substantially exceeds a standard? 13. List the six steps in the risk management process. 14. Describe what the risk management process foes for an organization. 15. List the elements of every loss exposure. 16. Identify the two ways in which a liability loss exposure can cause actual loss. 17. Describe how a balance sheet can be used to identify an organizations loss exposure. 18. Describe the five dimensions used in loss exposure analysis. 19. Distinguish between the risk control techniques of separation, duplication, and diversification. 20. Explain the basic distinction between transfer and retention as a means of risk financing. 21. What may serve as a basis for monitoring the risk management program? 22. Describe the four attributes traditionally used to assess structures. 23. Identify the six construction categories used by Insurance Services Office (ISO) 24. Explain the disadvantage of using the book value of a property from a risk management perspective. 25. Explain the circumstances in which a risk manager may choose market value as a means for valuing property. 26. Identify the approaches to valuing property. 27. Describe two ways a common carriers liability may be limited. 28. Describe the methods used to identify property loss exposures. 29. Explain why a risk manager should not be dependent on loss histories alone to identify property loss exposure. 30. Identify the categories of legal interests in property.