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Another alternative for companies with uninsurable risks is mutualization. However, this category of insurance carries further risks that may not be suitable for all companies. The main problem is that mutual insurers require participants to be from a homogenous population, making this alternative unviable for a variety of clients. Some companies are however working on overcoming such problems to make mutualization less problematic for their investors.
Some insurance companies now recognize the main concern of organizations for cash flow in the event of a major loss. These insurers then offer such organizations solutions that guarantee cash flow in the form of a possible loan alternative, which is then to be repaid at a later time, when the company has mitigated its loss. Cash flow insurance can then be based upon income factors such as future royalties or rental income, that are generally not shown on current income statements. Captives offer organizations tax benefits and flexibility in terms of what is insured and the premium amount they are prepared to pay. It is therefore a less rigid form of insurance, that offers the organization a wider range of choice in terms of both the product and investment in the organization's peace of mind.
In assessing their levels of pure risks and speculative risks, an organization should therefore also assess the insurability of their risks. A primary consideration is the danger of loss and the possibility gain. With the latter, it makes little sense to invest in insurance, as such a strategy is focused only on the risk of loss. Organizations should therefore perform an in-depth risk assessment in order to ensure that the optimal value is gained from each strategy used in risk mitigation, including the insurance strategy.
Risk Management Financial derivatives are an innovation in the field of finance that enable us to understand, measure and manage our financial risks. The definition of financial derivative according to the textbooks is of a financial instrument, and the value of any financial derivative is based on the value or values of the underlying securities or groups of securities that constitute the derivative. It can be said that there have been
They were just so intense, so focused, so transaction-driven, there literally wasn't time for people to put ideas out and discuss and debate them." These constraints to effective management oversight and innovation were further exacerbated when the company went private in 2001. According to Stopper, "ARAMARK went from a leveraged buyout situation in 1984, with only some 50 people having equity in the company, to an initial public offering (IPO)
" (nd, p.1) There are stated to be eight elements of 'Enterprise Risk Management' which include those as follows: (1) Education and Internal Environment: Staff should be educated in the overall risk management philosophy and risk appetite, integrity and ethical values and the environment in which they operate. (2) Objective Setting: The process of understanding how corporate objectives and risks interrelate and how they can affect the achievement of an entity's goals. (3)
Enterprise Risk Management in Wells Fargo during the Pandemic Introduction As Beasley (2020) points out, enterprise risk management (ERM) is especially needed during the COVID 19 pandemic because of the “number of different, but interrelated risks spread all across most organization” (p. 2). COVID 19 is not just a factor that has impacted one business or industry. It has impacted all businesses and all industries in different ways. Grocery chains like Kroger,
Corporate Governance of Commonwealth Bank: Australia's Commonwealth bank is a multinational bank with operations across the United States, United Kingdom, Asia, Fiji, and New Zealand. The bank provides various financial services including superannuation, broking services, investment, retail, business and institutional banking, and insurance. The financial institution is currently regarded as the country's second largest organization listed on the Australian Securities Exchange. Together with National Australia Bank, ANZ, and Westpac, Commonwealth bank
Managing Professionals in Virtual Environment As technology has evolved, the reality of virtual organizations has begun to take hold in a variety of industries. It is now commonplace for employees to work, at least in part, from offsite. Telecommuting is a reality that has allowed companies to reduce costs, become more competitive, and facilitate happier more productive employees. Virtual employees, or "telework is one of the most radical departures from standard