RISK 6

Section 6 Loss Data Analysis

In Section 6, the book indicates that there are both internal and external sources of data. Your assignment for Section 6 is to obtain loss data from an external source. You have several options - for example, the bureau of labor statistics has quite a bit of information including the occupational injuries and illnesses by year (here is the 2011 link http://www.bls.gov/iif/oshwc/osh/os/osch0046.pdf . ) There are other agencies (industry associations, bureau of transportation, American trucking association, etc.) that can provide you with useful data as well. I'm not picky about what you provide to me (although I appreciate originality and you cannot use the link I provided above). Please attach a link or copy & paste the data for submission (make sure you indicate where you found the info). I want you to then describe what you have given me - a short paragraph or two of what it is and how you find it useful. If you can tie in the industry you work in / are involved with that is even better.

HW Section 7 – Risk-Taking Appetite and Ability

Section 7 addresses risk taking appetite and ability. The book provides many factors that are considered by organizations when establishing their Risk Appetite (including ability). Your quiz covers the factors, so for your homework, you are going to need to do some research.

Your assignment is as follows:

1. Research two public companies on the internet (please provide me with their website address). Based on your review of the companies, please provide your recommendations for their risk appetite. Your answer will be either – high, medium or low for each company.

2. You will need to support your answer by providing me your explanation of why you suggested that particular risk appetite using the factors provided in the book. This information can be provided in bullet form.

a. You will need to support your answer by providing me your explanation of why you suggested that particular risk appetite using the factors provided in the book. This information can be provided in bullet form.

b. There are 5 Internal Factors, 4 External Factors – please use at least 4 in total. Also, there are 4 Financial Factors used to determine retention levels – please provide support from 1 of these as well (for example if their risk appetite is high, you are suggesting a high retention and you need to show their ability to finance that).

To clarify, your answer should be presented in this format:

ABC Company

www.abc.com

Risk Appetite Recommendation: High

Internal and External Factors:

· This is a well-established company with strong net income over the past 5 years. Compared to their peers, their profitability is very high.

· Their management is led by strong operations personnel who tend to be less risk adverse.

· Based on their operational history, they have taken many risks (i.e. their exploratory well in Columbia leading to the discovery of a new shale play) that have been profitable to them.

Financial:

· ABC has outperformed their peers in cash flow – they have very strong and steady cash flows securing their ability to finance a large retention if needed.