Insurance Risk
Unemployment insurance also ran aground because of this criteria. People-people that his job is secure will not buy unemployment insurance. Prospective clients, prospective – solely from those who feel their job situation is unsafe. If there is a recession, most of the insured (the insureds) will lose their jobs at the same time. This is just the same as life insurance companies that most of its policyholders die at the same time.
Insurance is a rule where some people are unlucky overwritten losses given indemnity (indemnified) by many people who are fortunate that in spite of the loss of it. But if instead the people who suffered the losses, of course people are slightly turned out to be insufficient to compensate them properly, except with a premium that is not economical. To guard against the loss – vigil since the catastrophic fire of concessions such as aiming at a broad distribution of exposure and set standards that prohibit the bearing of the termination of the company in a small section of the city. He also included the article in their policies that exclude losses because of the war, thus freeing them from losses due to atomic war is great. Life insurance companies often insert clauses in their policies during the war period in which there is a threat of war.
The nature of the company's Risk in the economy of the company, progress is usually measured with a profit. Therefore, circumstances that make profit unpredictability is a source of risk. The source of the risk in the company can be divided into dynamic risk (speculative) and the risk of static (pure).
Dynamic risk consists of three categories: risk management, political risk, and the risk of innovation. Risk management can be further divided into market risk, finance and production. The market risk arising from the uncertainty of whether production can be sold at a price high enough to make a reasonable profit on investment companies. The passage of time itself is also a source of uncertainty. The size and characteristics of the market for the company's products are always changing. Consumer tastes are changing their tactics change rivals.
Financial risk regarding search and administration of the funds of the company. To take a decision whether financing will be done by credit long term or short term, using his own capital or debts, wisdom of dividends and more details-other details pertaining to the company's revenue. Any uncertainty about the future will add to the problems of financial management.
Risk of production is concerned personnel, manufacturing techniques, and ways to get the ingredients. The company's need to wear a variety of raw materials or the mix of manpower capital in making on-product? discretion should be changed? labor contract negotiations gives rise to many problems. The threat of ancient machinery and production techniques is an important source of uncertainty. In addition to the risk is the risk management and risk political innovation open (updates). Political risks may arise when car manufacturing in the forced by law to add tools safety car on his car. National political changes against foreign Nations could undermine the program's industrial expansion has been in the design and in the stipulated fine.
The risk of innovation arise when employers are introducing new products that according to his belief in the need of the community demand for the products or it can be in its sense.
Dynamic risk certainly does not always result in a loss for employers. The loss of one entrepreneur may be an advantage to other entrepreneurs, such as the migration of people from bar SOAP to SOAP detergent. Dynamic risk raises the possibility of loss but also the possibility of profit (better chance of gain). Therefore, the risk of this dynamic is also called risk speculative. Management should reduce risk with better planning to increase the likelihood of gaining profit.
