Answer to Question #166076 in Management for Prabhdeep

Question

Subject :insurance management

1.state major reforms or steps initiated by government of India which have taken place in the Indian Insurance sector after the post liberalization Era started in 1991?( please answer in 200 to 250 words in detail )

2.(a)explain the concept of risk avoidance ?( Please answer in 100 to 150 words)

(b)when risk avoidance is an appropriate risk management technique? ( Please answer in 100 to 150 words)

(c) explain why theoretical probability distribution is useful for Risk managers ?(please answer in detail in 150 to 200 words in points)

Answer 1

1. Indian reforms in the insurance sector (life and general) commenced with the setting up of the Committee on Reforms on Insurance Sector under the chairmanship of Dr. R.N. Malhotra, the ex-governor of Reserve Bank of India (RBI), by the Government of India in April 1993, in order to examine the structure of the insurance industry. The initial steps in this direction were the setting-up of the Insurance Regulatory and Development Authority (IRDA) and the opening up of insurance business to foreign capital up to 26 per cent.
2. a) Risk avoidance concept is the elimination of hazards, activities, and exposures that can negatively affect an organization's assets.

b) When risk avoidance takes some sort of action or putting plans in place that will greatly reduce the likelihood of the risk event even happening, not just reducing its impact.

c) Theoretical probability distribution is useful when risk managers need to know which outcomes are most likely, the spread of potential values, and the likelihood of different results.