保险英语Unit 8

　　[00:00.00]A risk management program

[00:02.46]The scientific method of planning to deal with losses is called risk management.

[00:08.12]A risk management program usually involves three steps:

[00:12.77]1.Identifying and measuring exposures to loss

[00:17.66]2.Developing and implementing 2 plans to deal with potential losses after they have been identified

[00:25.50]3.Regularly reevaluating and updating the risk management program

[00:31.66]Identifying and measuring exposures

[00:34.87]The recognition that a problem exists is always the first step in solving the problem.

[00:41.01]Recognizing one's exposure to loss requires organized thinking about the subject.

[00:47.15]One starting point is to categorize the sources of loss into speculative 3 or pure risk exposures.

[00:55.28]Speculative risks are exposures that can result in gains or losses and usually are not the subject of risk management.

[01:04.65]Losses or gains that result from bad or good management decisions,from a competitor's actions,

[01:11.60]or from government intervention 4 in the economy are examples of speculative risks,

[01:17.64]and these are usually outside the scope of the risk manager's responsibility.

[01:22.76]Price fluctuation 5 in commodities or foreign currencies,however,can result in gain or loss,

[01:30.44]and this speculative risk can be managed with a hedging program.

[01:35.63]On the other hand,pure risks can result only in losses and usually arise from the following sources:

[01:43.89]1.Direct losses of property

[01:47.15]2.Indirect losses of income because normal business activity has been interrupted by a direct loss

[01:54.89]3.Liability losses

[01:57.86]4.Losses due to death or disability of key personnel

[02:03.53]These pure risks usually can be managed once they have been identified and measured.

[02:09.31]Regarding measurement,it is well to remember that,before a loss occurs,measurement is merely an estimate.

[02:17.30]Not all preloss estimates will necessarily reflect with accuracy the actual amount of damages or even the actual amount of exposure to loss.

[02:27.25]Developing and implementing a risk management program

[02:32.01]After all potential sources of loss have been identified and measured,

[02:36.24]it is the job of the risk manager to develop and implement 1 plans to deal with the potential losses before they occur.

[02:43.94]Accomplishing this task demands a knowledge of the alternative methods of dealing 6 with risk,the uncertainty 7 about loss.

[02:51.91]In addition to insurance,six other methods of dealing with potential losses are:

[02:57.82]1.Risk avoidance

[03:00.40]2.Risk assumption

[03:03.04]3.Self-insurance

[03:05.86]4.Loss prevention

[03:08.68]5.Loss reduction

[03:11.37]6.Risk transfer other than insurance

[03:15.06]A thorough risk management program is the result of the consideration of all these alternatives,

[03:21.35]rather than the reliance on just one method of dealing with an exposure to loss.

[03:26.63]In every case the risk manager with carefully weigh the ratio of the costs of a particular risk management approach withthe potential benefits to be produced.

[03:36.82]Since unlimited 8 budgets for risk management are not the rule,spending priorities must be established.

[03:44.34]Also determining the choice of an appropriate tool are an estimate of the chance of loss and an estimate of the severity of a potential loss.

[03:53.69]Once a decision has been made to treat an exposure to loss with a given risk management tool,the decision must be implemented 9.

[04:02.73]For example,if it has been decided 10 to purchase insurance,

[04:06.88]arrangements must be made to acquire the proper amount of insurance at the best possible price accompanied by all the service needed or desired.

[04:16.39]Equally important,once the insurance is in force,

[04:20.36]the risk manager must be familiar with the terms of the contract so that none of the firm's actions cause the coverage 11 to be suspended

[04:28.54]or the conditions of the contract to be breached 13 in any way either before or after a loss occurs.

[04:35.17]If a loss prevention program is decided upon,the risk manager must see to it that all affected 14 employees,

[04:43.19]know what the plan's aims are and what part they are expected to play in the program.

[04:48.47]The risk manager must remain alert to any advances in safety engineering that may make a given operation or plant or store a safer place in which to work.

[04:59.96]The insurance mechanism 15

[05:02.18]One of the chief problems that risk management has had to overcome has been to differentiate 16 itself from insurance,

[05:10.20]partly because of the insurance background of many of the pioneers in risk management thinking,

[05:15.77]and partly because risk-at least those varieties of it with which risk management is chiefly concerned-

[05:22.82]has for so long been considered the preserve of insurance alone.

[05:27.50]The confusion has been perpetuated 17 because insurance retains such an important role as the main method of risk financing in a risk management programme.

[05:37.61]Risk management does not supersede 18 insurance,but puts it in its proper perspective,

[05:43.30]as fulfilling a useful function determined 19 after critical assessment 20 of what it has to offer compared with other financing possibilities.

[05:52.52]To get the best out of any risk management programme,therefore,requires a knowledge of how the insurance mechanism works,

[06:00.52]and an appreciation 21 of ways in which the insurance industry treats the risk passed on to it in return for the premium 22 paid.

[06:09.35]For the purchaser,insurance provides a method of smoothing loss experience over a period of time,

[06:16.22]by exchanging the static risk which is insured for the smaller risk of the failure of the insurer to settle a claim when it is made,

[06:24.68]either through lack of funds or by some breach 12 of the conditions of the insurance contract by the insured himself.

[06:32.25]Except for the small insured,or the catastrophic loss,it is unlikely that the cost of loss will be permanently 23 transferred from the insured to the insurer;

[06:43.20]for the latter will seek to recover what he has paid out by increased premiums 24 in subsequent years,

[06:49.94]or he may already have recovered it in previous years when the premiums paid have been greater than the amount needed to pay claims and meet the insurer's expenses.

[07:00.75]Where the market for a particular type of risk is not governed by rating agreements between insurers,

[07:07.05]it may be possible to defer 25 or avoid repayment 26 of the cost of loss by changing insurers,

[07:14.34]but in most cases this will be only a short-term solution,

[07:18.88]unless there has been some substantial improvement in loss control to improve the probable future cost of loss.

[07:26.67]A new insurer may offer a lower premium,taking the chance that the loss experience will improve,

[07:33.59]but if it does not,then the premium cost is likely to rise to,and perhaps beyond,its old level.

[07:41.19]The service of chronological 27 loss spreading is,however,what the insured really needs,

[07:47.41]even if the total cost is not thereby 28 reduced,for it enables him to reduce the annual cost of large losses to a size at which they can be borne in a single accounting 29 year.

[07:58.98]From the insurer's point of view,the risk that is transferred to him has a different aspect.

[08:05.51]What was a static risk for the insured becomes a dynamic risk for the insurer,

[08:10.97]for in his hands it presents possibilities either of profit or of loss.

[08:16.54]The fact that a reinsurance market exists as a method of treating this risk is,

[08:21.84]however,a reminder 30 that static risk and insurable risk are not synonymous terms.

[08:28.58]The methods the insurer uses to treat the risk he carries are themselves a good example of risk management in action.

[08:36.00]He seeks first of all to diminish his risk by ensuring that it is well spread.

[08:42.21]This is achieved in a number of ways.

[08:44.72]First,a good spread of risk is sought by endeavouring to ensure that the portfolio 31 he is insuring consists of a large number of similar items.

[08:54.47]This will give the greatest play to the operation of the law of large numbers,and thus improve the predictability of the loss experience.

[09:02.90]Next,the insurer will wish these insurances to come from many different locations to provide the necessary geographical 32 spread

[09:12.05]to minimise the chance of an abnormal loss experience due to a localised catastrophe 33.