Corporate risk management Essay Example | Topics and Well Written Essays - 1500 words

Corporate risk management - Essay Example Each region or country has their own rules and regulations to be followed. There are many additional features like giving financial protection against theft of the vehicle or possible damage to the vehicle. It is illegal for any person to run their vehicle in the road without any motor insurance. Most of the jurisdiction are applied both to the drivers well as to the car, though degree of severity varies. There are many countries where there is a scheme like â€Å"pay-as-you-drive†. Here the driver has to pay the premiums through the gasoline tax that he uses. Using this both the problem get solved, one like charging the uninsured motorists and another is to charge them based on the number of miles. This increases the efficiency of the insurance through streamline collection. But associated with it is the risk of insurance companies charging higher premiums than others. But being a compulsory thing, the motor man sometimes faces the risk of paying higher insurance in cases if he doesn’t get any options. Discussion The manager here owns a fleet of motor vehicles. The problem here is that the motor insurer has given them a premium quotation which appears to be high to them. Hence the manger has to look for alternative course of action. The manager must look for other motor insurance provide. The manager must know what the options available to him in the market are, like he can go to any brokerage house where there is a number of insurance provider tied up with them. Manager must understand the features offered by the insurance provider (Frenkel, Dufey, Hommel and Rudolf, 2005, p. 543). There are several basic features which he needs to look at. Like the Liability Only Policy. This type of insurance policy covers the liabilities of insure towards third parties only. It is mandatory for the each and every vehicle which runs in any the public place as per the Motor Vehicles Act of any country. Next important step is the Package Policy. This states that for any loss or any damage to the vehicle insured it will be covered subject to the terms and conditions to the policy. The manager must understand that premiums are calculated on various factors like type, usage, model, place of registration, past claims of history etc. of the vehicle under consideration. Hence the approach should be known to him (Vinnem, 2007, p. 32). He must understand that while buying a fresh new insurance during the renewal he can go for other companies who provide the insurance. The manager must also know that if the premium is charged too high he can go to the insurance provider and ask for the exact details of the components where the money is being charged high. He must mention whether the vehicle runs on Gas or on Petrol because each of them will have a different cost attached to it (Khatta, 2008, p. 241). Hence the manager should understand the fact that there is a risk of moving from one insurer to another new insurer. For any new client the motor car insurance provider will check what is the vehicles damage, what is the cc of the car and accordingly quote the premium. But it might happen that government may increase tax rate which is applicable to the motor insurance. And as a result the premium may again rise (Merkin and Smith, 2004, p. 387). Hence the manger has to consult many insurance providers at the same time and assess the risk by discussing with them. There are many steps to assess the risk. First step is to identify hazard, here the managers must know