Insurable risk

Abstract: Since the mid-1990s, enterprise risk management has emerged as a concept and as a management function within corporations. Enterprise risk management is a systematic and integrated approach to the management of the total risks that a company faces. Its emergence can be traced to two main causes. First, following a number of high-profile company failures and preventable large losses, the scope of corporate governance has widened to embrace the risks that a company takes. Directors are now increasingly required to report on their internal risk control systems. This is either through voluntary codes, such as the Turnbull Guidelines in the U.K., or by legislation, as in Germany through the ‘‘Control and Transparency in Entities’’ Law. Second, shareholder value models are playing a greater role in strategic planning. Early strategic planning models paid insufficient attention to risk. Modern strategic planning models are based more on shareholder value concepts, which draw their inspiration from the finance theory where risk has always played a central role. 2. Origins of risk management Risk management as a formal part of the decision-making processes within companies is traceable to the late 1940s and early 1950s. There were two earlier strands of risk management practice that have more recently been integrated under the broader concept of enterprise risk management. One of these strands relates to the management of insurance risks and financial risks. For many years, companies have been able to transfer certain types of risks to insurance companies. These transferred risks related to natural catastrophes, accidents, human error or fraud, but as the scope of insurance markets expanded, some types of commercial risks could be transferred, such as credit risks. The existence of these insurance markets forced managers to consider alternatives to the purchase of insurance. Some of these insurable risks could be prevented, or their impact reduced, through efficient loss-prevention and control systems, and some could be retained and financed within the company. This led to a broader approach to the management of insurable risks.

Abstract: The monitored use of a vehicle provides accurate and reliable data that can be used to determine the insurable risk of a vehicle operator. What is disclosed is a system and method for monitoring vehicle operation and using the collected data to calculate a driver score. The driver score can then be applied to ascertain the risk of insuring a particular driver, as well as being used as a tool for defining or adjusting the terms of an insurance policy for an insured driver. The collection of data such as the times the vehicle is operated, the locations the vehicle is operated and the speeds or other characteristics of how the vehicle is operated can all be used to calculate the driver score. By installing a vehicle monitor within a vehicle and extracting this or similar data, more accurate and profitable insurance policies can be developed.

Abstract: The monitored use of a vehicle provides accurate and reliable data that can be used to determine the insurable risk of a vehicle operator. What is disclosed is a system and method for monitoring vehicle operation and using the collected data to calculate a driver score. The driver score can then be applied to ascertain the risk of insuring a particular driver, as well as being used as a tool for defining or adjusting the terms of an insurance policy for an insured driver. The collection of data such as the times the vehicle is operated, the locations the vehicle is operated and the speeds or other characteristics of how the vehicle is operated can all be used to calculate the driver score. By installing a vehicle monitor within a vehicle and extracting this or similar data, more accurate and profitable insurance policies can be developed.