You are a risk manager for EN plc, a newly formed insurer. EN plc was created by the merger of two competing insurers.
You are combining the two former insurers’ risk registers into a single risk register. You are also preparing for a visit by the regulator.
The risks on the register for EN plc have yet to be categorised. The risk categories will be on the agenda for the regulator’s visit.
Explain, with justification, two significant risk categories that will be of interest to EN plc’s regulator.
Question 5 – Learning Outcome 5:
You are the Risk Manager for AL Ltd, a privately owned logistics company. AL Ltd operate a fleet of vehicles and own two purpose built warehouses (A and B) that are located in close proximity to each other.
The vehicles in the fleet, when not on the road, are garaged in warehouse A. Warehouse B includes an office that contains the information technology (IT) system for stock control.
The table below shows AL Ltd’s key assets and their values.
ASSETS ASSET VALUES (£MILLION)
Warehouse A building 3.1
Warehouse A stock & contents 2.2
Warehouse B building 2.9
Warehouse B stock & contents 1.4
IT systems and office contents 1.0
An individual fleet vehicle 0.1
Total vehicle fleet 2.0
When reviewing the risk management plan, you have identified a number of catastrophic risk events. This information will form the basis of your forthcoming discussions with AL Ltd’s insurance broker.
(a) Explain, with justification, how you will determine the asset values whilst considering potential catastrophic
(b) Calculate, showing all your workings, the maximum possible loss should a catastrophic fire start in
warehouse A. Include in your answer the assumptions you have made.
(c) Calculate, showing all your workings, the maximum probable loss should a catastrophic fire start in
warehouse A. Include in your answer the assumptions you have made