1. The Swift Corporation is encouraged
to embrace loss prevention
Corporation will notice an increase in their expense savings.
actual losses lower than the loss allowance in the insurer premium, Swift Corporation
is bound save more money.
4. Swift Corporation will notice increase
in cash flow as they have access to cash which is typically held by the insured
loss allowance in the insurance premium which is saved by not procuring insurance
may be less than the losses retained by the Swift Corporation, thus creating a
huge volatility in the firm’s loss experience in the long run.
of loss prevention programs which insurer can provide at fair prices, because
the expenses may be higher than imagined.
company tax aspects
average frequency and the level of severity of the company losses.
of the losses
full amount of losses to be retained by the company
cost in relation to the retention of loss like administrative issues.
total past losses incurred by the company.
incase the management of Swift Corporation are risk averse
There different methods Swift Corporation can use to
pay up for the physical damages. The company can approach a captive insurer to
help in this case. Another option is to pay out from the current net incomes of
the company. Borrowing funds from commercial lenders is also an option Swift Corporation
may take into account when trying to find solution to this problems.
Corporation should avoid employing drivers with tainted driving experiences with
history of poor driving skills and accidents
company needs to go level higher by ensuring all drivers undergo through a
defensive driving course to reduce the losses and physical damages.