CRM ‘Risk identification is an undeveloped art. It is more effective when losses are small and frequent than when they are large and infrequent’. Discuss these statements in relation to a range of risk identification techniques. Explain the key variables and estimation processes involved in applying the net present value (NPV) appraisal technique to a typical business project, a loss control project and risk financing arrangements. For a disaster of your choice (major or minor), explain how arrangements for EACH stage of the risk management cycle were applied before the event AND how, in retrospect, they could have been better performed. (25 marks) Evaluate the usefulness of probability concepts and statistical techniques for dealing with an organisation’s overall loss exposure, loss control for individual assets and assessing the quality of estimates based on past data. For an organisation (or part of an organisation) of your choice, describe the potential losses that could arise, rank the losses you have described in terms of their severity (low, medium or high) and likelihood (low, medium or high) and suggest appropriate risk management techniques for dealing with each of the loss exposures. Charlie is risk manager for Blue Van Co., a firm which owns a fleet of vans which are rented out for private or commercial use. When customers hire a van, they also pay Blue Van Co. a sum of money to cover potential damage to the vehicle during the hire period. Each year, Charlie purchases a fleet insurance to cover all the vans in the fleet against damage. Charlie keeps good records of losses and, for the past 5 years, they were as follows: Loss data for Blue Van Co.’s vans (adjusted for inflation) Year Number of vans Number of damage Total cost of in fleet accidents repairs (£) 2004 950 150 …