There is no good strategy in which a risk manager will have a $0 deductible because the premiums for the insurance will cut into the bottom line. A risk manager knows it is inevitable they will have losses throughout fiscal year. A risk manager can use loss control in the form of surveillance cameras, retention meaning that they budget to lose some money and therefore eat the costs of the loss, avoidance in the form of staying out of a market because they realize there is not a profit to be made, a non-insurance transfer in the form of a sign warning people, and lastly insurance to cover risks. A risk manager will utilize insurance for events in which a loss would destroy their company. Yet, most risk managers think about the big picture not individual risk, because it saves time and …show more content…
355).” This method can be summed up into a few steps: 1) Accounting for all areas of risk exposure whether it is financial, compliance, reputation, and etc. 2) Manages risk exposures in an interrelated risk portfolio rather than covering each risk individually. 3) Calculating the entire risk portfolio and where they have exposures. 4) Distinguishing that all these individual risks can be interrelated and may cause coalesce of risk exposure that is different than the sum of individual risk “silos.” 5) Structuring a process for managing all risk, even though some are “primarily quantitative or qualitative in nature.” 6) Effective risk management will give a company a comparative advantage in their industry. 7) Risk management is a crucial piece in all decisions throughout the