Evaluating Risk Financing

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Level: Intermediate

Why you need this course:
After completing this course, you'll be able to evaluate your organization's overall mix of retained and transferred loss exposures.

Upon successful completion of this course, you should be able to:

  • Explain how individuals or organizations can achieve their overall and risk management goals by fulfilling the following risk financing goals:
    • Pay for losses
    • Manage the cost of risk
    • Manage cash flow variability
    • Maintain an appropriate level of liquidity
    • Comply with legal requirements
  • Describe the following aspects of retention and transfer:
    • Retention funding measures
    • Limitations on risk transfer measures
    • The advantages of both retention and transfer
  • Explain how the following can affect the selection of the appropriate risk financing measure:
    • Ability of a risk financing measure to meet risk financing goals
    • Loss exposure characteristics
    • Characteristics specific to an individual or organization
  • Explain how an organization meets its risk financing goals by using the following risk financing measures:
    • Guaranteed cost insurance
    • Pools
    • Self-insurance
    • Retrospective rating plans
    • Large deductible plans
    • Hold-harmless agreements
    • Captives
    • Capital market solutions
    • Finite risk plans
  • Explain how risk financing measures are applied to the four types of loss exposures.

Cost: $20 per Professional Development Hour (PDH). Information on Professional Development Hours (PDH) provided can be found here.

Evaluating Risk Financing Topics Include:

  • How overall and risk management goals can be achieved by fulfilling risk financing goals
  • Retention funding measures and the limitations on risk transfer measures as aspects of retention and transfer
  • How the ability of a risk financing measure to meet risk financing goals, loss exposure characteristics, and characteristics specific to an individual or organization can affect the selection of the appropriate risk financing measure
  • How guaranteed cost insurance, pools, self-insurance, retrospective rating plans, large deductible plans, hold-harmless agreements, captives, capital market solutions, and finite risk plans help an organization meets its risk financing goals
  • How risk financing measures are applied to the four types of loss exposures

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