Summary |
Risk financing techniques are the sources of funds from which an organization can restore its accidental losses. The purpose of the risk financing phase of the risk management function is to find that combination of risk financing techniques for a given organization which (1) promise to be least costly for that organization in the long run based on the organizations expected loss experience and (2) provides a sufficiently high probability, in the eyes of its management, that the organization will at least survive regardless of its actual loss experience. The purposes of this essay are to present a logical classification of these financing alternatives and to describe the criteria for selecting from among these alternatives.
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