Corporations can purchase insurance as a means of reducing their risks. What are the primary limitations on the extent to which insurance can reduce the risks faced by a corporation?
Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks - this includes standard disaster and government-mandated insurance, such as commercial automobile liability and workers' compensation insurance, but also extends to voluntary coverage such as commercial multi-peril, ocean marine coverage (if engaged in shipping), medical malpractice (if in the health services industry), product liability insurance, professional liability insurance (including extending to ...
Solution Summary
Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks. This response details many of these ways.
... to the re-insurer with an aim of reducing the rate of ... has a goal of ensuring that the existing level of risk exposure to scenario such as losses is reduced. ...
... This will reduce the industry risk... yielding maximum expected return at a specified level of portfolio risk. ... bank deposits as they would have reduced the overall ...
... history, prophylactic mastectomy can significantly reduce the incidence ... is very effective at reducing the chances ... is extremely effective and reduces the risk...
... is a well-known method for reducing market risk... By decreasing its debt, a business can reduce its level ... maintain high cash flow, which in turn reduces its need ...
... Consumer surplus is reduced in most cases - representing ... hardest decision to make about reducing, given the ... this category should definitely reduce, since blood ...
... c. What are the alternative methods of handling the risk? ... Advantages: Insurers can transfer risks that are linked to ... by doing this they can reduce the problems ...
... Furniture: Optimal WACC, valuation techniques to reduce risk, NPV. ... use of multiple valuation techniques in reducing risks. ... 789.00 789.00 Prices are reduced by 10 ...
... less economically efficient when those in low risk groups reduce the level of ... the means for subsidizing those in high risk groups is reduced and becomes ...
... In managing risks, managers have the following options: Accept the risk yet continue ... steps to eliminate the threat Reduce the probability of ...
