MANAGEMENT

Detailed explanation-1: -Risk reduction deals with mitigating potential losses by reducing the likelihood and severity of a possible loss.

Detailed explanation-2: -Risk reducing measures include frequency reducing and consequence reducing activities, and their combinations. The measures may be of a technical, operational, and/or organizational nature. Choosing the types of measures is normally based on a broad evaluation, where risk aspects are considered.

Detailed explanation-3: -Loss Prevention and Reduction: When risk cannot be avoided, the effect of loss can often be minimized in terms of frequency and severity. For example, Risk Management encourages the use of security devices on certain audio visual equipment to reduce the risk of theft.

Detailed explanation-4: -Frequency refers to the number of claims an insurer anticipates will occur over a given period of time. Severity refers to the costs of a claim-a high-severity claim is more expensive than an average claim, and a low-severity claim is less expensive.

Detailed explanation-5: -Risk management is the continuing process to identify, analyze, evaluate, and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss. Loss may result from the following: financial risks such as cost of claims and liability judgments.