Cost Effectiveness of Risk Management Practices

Despite the increasing importance of risk management in a successful business organization, virtually no research has been undertaken to evaluate the effectiveness of various risk management practices. Through analysis of data obtained from a survey of risk management professionals, such an evaluati...

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Bibliographic Details
Published in:The Journal of risk and insurance 1990-09, Vol.57 (3), p.455-470
Main Authors: Schmit, Joan T., Roth, Kendall
Format: Article
Language:English
Subjects:
Business insurance
Business risks
Business structures
Captive insurance
Cost benefit analysis
Costs
Effectiveness
Financial risk
Insurance management
Insurance premiums
Insurance providers
Risk management
Risk retention
Self insurance
Statistical analysis
Studies
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Summary:Despite the increasing importance of risk management in a successful business organization, virtually no research has been undertaken to evaluate the effectiveness of various risk management practices. Through analysis of data obtained from a survey of risk management professionals, such an evaluation has been made and is reported here. Results include the expected effects of lower costs associated with higher levels of retention, increased size, and less risky industries. The relationship of higher costs with the use of a captive, and the ineffectiveness of centralization or use of analytical tools were unexpected.
ISSN:0022-4367
1539-6975
DOI:10.2307/252842