Information Technology Reference
In-Depth Information
Premiums Decrease with %
Risk Acceptance
100%
}
Optimal
Acceptance
0%
Cost
Figure K.2
risk acceptance.
the premium cost for transferring all risk is likely to be exorbitant even if this
option is available at all (Figure K.2). Use E-insurance as part of a comprehensive
risk management program that balances risk mitigation and sharing.
Balancing Risk Management
Figure K.3 shows a balance of risk mitigation and residual risk sharing to pro-
vide an optimal investment in risk management. Work with insurance providers to
determine the best method to optimize E-insurance premiums:
n
n
Insuring for less than residual risk
Increasing deductible and using E-insurance for catastrophic losses and
absorbing nuisance losses in-house
Premiums Decrease with %
Risk Acceptance
100%
Risk
Mitigation
}
Optimal
Investment
Risk
Acceptance
0%
Cost
Figure K.3
Balance of risk mitigation and risk acceptance.
