This is a doctor in business adminitration student's report in the Risk Management & Development class

1. Loreto “Jong” Dumlao Azores, Jr.
Polytechnic University of the Philippines, Graduate School
DBA 737 Risk Management & Development
1st Semester 2014-2015
Dr. Rodolfo De Lara
Professor

2. HTTP://WWW.RISCARIO.COM/RISK-MGMT-TECHNIQUES
A. Pure risks (chance of loss but no chance of gain) A category of risk in
which loss is the only possible outcome; there is no beneficial result. Pure
risk is related to events that are beyond the risk-taker's control and,
therefore, a person cannot consciously take on pure risk. This is the
opposite of speculative risk.
1. risk avoidance
2. loss control
B. Speculative risks (chances of gain or loss ). A category of risk that,
when undertaken, results in an uncertain degree of gain or loss. All
speculative risks are made as conscious choices and are not just a result
of uncontrollable circumstances. Speculative risk is the opposite of pure
risk.
1. risk retention
2. risk transfer

3. 1. Elimination of risk at any cost
(e.g., drop a hazardous product)
2. Most aggressive and effective … but not practical
eg, staying in bed all day to avoid risk of injury or death

4. Loss Control – Are all the methods taken to reduce the frequency
and/or severity of losses including exposure avoidance, loss
prevention, loss reduction, segregation of exposure units and non-
insurance transfer of risk.
1. loss prevention: reduce frequency of loss
usually impossible or impractical
(e.g., to maintain income —> insurance or adopt a healthier lifestyle
2. loss reduction: reduce the severity and financial impact
eg, upon disability —> physical rehabilitation, crosstrain a backup
3. safety measures, pooling, segregating (e.g., key employees
travel separately), diversifying (not imperiling group by one
member’s actions)

5. A concept of accident investigation and prevention which takes
into account such factors as damage to property and equipment,
lost time, and wasted resources. This approach includes
recording and evaluating “near misses” and “incidents” that may
have resulted in an interruption of production, spill or leak of
material, unscheduled maintenance of equipment, or event
where an individual narrowly avoided an injury
Such an approach attempts to take advantage of not waiting for
a loss to occur but identifies actions or events that could have
resulted in injury or loss and using this information to prevent
losses in the future.

6. This concept refuses to accept these as causes of accidents:
I. “Act of God” example: prevent being struck by lightning (Considering
lightning is an Act of God). Don’t stand under a tree when there is
lightning; Install lightning rods on high buildings; Don’t be outside
in a lightning rain storm;
II. “Accident Prone” indicates a person: 1. Not capable of performing the
needed task, 2. A person not properly motivated to do required tasks,
3. An inadequately trained person, 4. A lack of effective supervision
III. “Carelessness” indicates a person: 1. Not properly trained to do the
task, 2. Not properly supervised in order to identify skill or training
problems, 3. A poorly designed and/or operating interface between
man and machine, 4. An ergonomic problem of work speed, body
position, and or weight of materials, 5. A poorly motivated person due
to lack of training or supervision

7. LOSS CONTROL IS GAMBLING – but potentially very
profitable gambling! The greater the effort to prevent losses
– the greater the odds that there will be fewer and fewer
losses as time goes on. Injuries to employees, damaged
equipment, and loss of raw materials and product, are all
means of reduction of profits and increase in losses. Total
Loss Control is an ideal way to increase profits without
increasing prices even when raw material prices or “cost of
goods sold” increase.

8. Finance some or all of the losses yourself
eg, health insurance has deductibles and waiting
period

9. 1. Noninsurance
eg, relatives help out
2. Insurance
formal arrangement between you and an insurer

12. Expected
frequency
Expected
severity
Techniques *
Low Low Retention
High Low Retention
Low High Transfer
High High Avoidance
Loss Control should be considered in conjunction with each technique

13. Thank
You