Risks transfer

Insurance industry is also developing alternative risk transfer products, given that conventional reinsurance arrangements may in future cover a smaller proportion of total losses, and there may be insufficient capital available to insurance markets to cover these losses [15]. 

Raska et al. (2010) introduced the concept of a risk based method transfer process (which is similar to USP transfer waiver approach). This involves assessing the risk that the sites involved in method transfer could generate non-comparable data either at transfer or subsequently thereafter and assessing the probability of that risk occurring. Thus with constrained resource it is more sensible to focus that resource on either avoidance or mitigation of high risk transfers, whilst accepting the limited risk inherent with a low probability risk scenario. 

Different approaches towards structuring the various kinds of political risks can be found in literature (e.g., Meldrum 2000, pp. 34-35 Desta 1986, pp. 50-53). As shown in Figure 57, typically, based on the impact of the respective type of political risk, one can distinguish between asset protection risks, transfer risks and operational risks (cf. Root 1972, p. 357). Additionally, a separation into macro risks affecting all foreign companies operating in a country and micro risks that are specific to the industry and/or the individual company should be made (cf. Robock 1971, pp. 9-11). 

Risk reduction is often not a choice but simply required. Basically there are three risk management options carry/accept the risk, transfer the risk (for instance insurance, but also labeling a disclaimer can be considered as a transfer of risk), or avoid or reduce the risk. 

Once clothing has been nsed for handling pesticides, it should never be nsed for any other activity. To do so would risk transferring contamination to other persons, animals, and things outside the pesticide-handling environment. 

Insurance is concerned with financial risk transfer. It is an arrangement whereby one party (the insurer) promises to compensate another party (the insured or policyholder) a sum of money if an event occurs which causes the insured to suffer a financial loss. The responsibility for paying for such financial losses is then transferred from the policyholder to the insurer. In return for accepting the burden of paying for losses when, and if they occur, the insurer charges the insured a price—the insurance premium. 

Gregory J. Smith, Risk Transfer Services, Woodridge, IL, USA... 

The issuer of the original debt or borrower of the original loan, known as the reference entity, need not be a party to the credit risk transfer and in fact is usually not even aware of the transaction, thus allowing the client relationship between the lending bank and the borrower to be maintained. 

Risk control/treat risk/address risks/risk response. When risks are not (yet) considered acceptable we can abandon the (potentially) activity to avoid them, we can reduce them, or we can transfer them to third parties. Securities and insurance markets provide important mechanisms for risk transfer. 

In addition, Bill Johnson used a scroll as a normally expected event and an oval as a satisfactory event. The normally expected event distinguishes events that are typically a part of any system, such as change and normal variability. The satisfactory event describes events that may be accident causal factors but are a necessary part of the operation, like functional (part of the system) people or objects in the energy channel. Also, in addition to using the traditional transfer symbol (a triangle), the MORT chart includes capital letters as drafting breaks and small ellipses as risk transfers (Fig. 18-3). 

Risk transfers are found in two places. They are found next to undeveloped terminal events, and they are found near the top of the chart as assumed risks. The implied logic is that barriers, controls, or evasive actions are not possible or practical in those areas where there are undeveloped terminal events. If activity is continued under these circumstances, then some risk is assumed or accepted. The small assumed risk transfers are used to denote a transfer up to the small ovals under the assumed risk portion of the MORT chart. 

The provision of suitable measures or elements to eliminate or control real or potential hazards. Risk control may be done through risk avoidance, risk retention, risk transfer, or risk reduction measures. See also Risk Avoidance Risk Management. Risk Reduction Risk Retention Risk Transfer. 

Another form of risk transfer is insurance. Insurance is designed to permit the company to shift the financial consequences of the risk to an insurance company. By paying the insurance company s premiums, the organization can expect specified benefits in the event of a loss. The insurance company enters into similar relationships with a number of other companies by selling them insurance policies too. With large numbers of insureds, it can more accurately estimate its own losses. When an insured company turns in a claim, the insurer is... 

Risk control strategies may be classified into four main areas risk avoidance, risk retention, risk transfer and risk reduction. 

Risk transfer refers to the legal assignment of the costs of certain potential losses from one party to another. The most common way of effecting such transfer is by insurance. Under an insurance policy, the insurer (insurance company) undertakes to compensate the insured (organisation) against losses resulting from the occurrence of an event specified in the insurance policy (e.g. fire, accident, etc.). 

The introduction of clauses into sales agreements whereby another party accepts responsibility for the costs of a particular loss is an alternative risk transfer strategy. However, it should be noted that the conditions of the agreement may be affected by the Unfair Contract Terms Act 1977 and the interpretation placed on reasonableness. ... 

The bringing together of insurance (risk transfer) and loss control (risk reduction) was the final stage in the development of the new discipline of risk management. 

High-frequency, high-consequence risks should (ideally) be avoided by managing them out of the organisation s risks portfolio. If this appears to be an uneconomic (or unpalatable) solution, then adequate insurance -i.e. the risk transfer option - must be arranged. 

Risk transfer involves shifting the point of risk to other parties who are better equipped to control the risk. This might be done because of inadequate equipment, experience or skill with a particular task. In an oi nization an example of this is the use of emergency management teams which are trained to combat disasters. Insurers tend to use the term risk transfer to mean that the cost of the retained risk has been transferred to the insurer. 

Analyses of radio-epidemiological data, e.g., the A-bomb survivors data, can be based on the assumption of an excess relative risk (ERR) model or an excess absolute risk (EAR) model. The ERR model assumes that the excess risk is proportional to the baseline (or spontaneous) risk, the cancer risk for a person to be diseased with a specific cancer in the absence of radiation. The EAR model expresses the risk as difference in the total risk and the basehne risk. The choice whether the ERR or the EAR model is taken to estimate radiation risks can be a crucial point due to the fact that risk estimates based on an ERR or an EAR model can vary considerably when individual tumor sites are considered. This issue is also called transport (or transfer) of risks from the exposed population to the target population (e.g., from a Japanese to a European population) and corresponds to the question whether the ERR or the EAR is taken to be the same in the exposed population and in the reference population (see below). Section 3.3 elaborates on the issue of radiation risk transfer, and Fig. 7.3 gives an illustration. 

Most often, emerging technology companies take a proactive approach hy employing both mitigation and risk transfer. This combination provides for risk control and for substantial financial protection at an affordable premium, allowing the company to retain funds for activities focused on its business objectives. 

The following section discusses risk transfer and insurance in further depth. 

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