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SCS 2921 Foundations of Risk Management (University of Toronto)
Question
The city of Matawan, population 500,000, has just privatized its formerly municipally owned trash collection service to a privately owned, multi-state waste disposal firm, ABC Environmental Special Services (ABCESS).
The risk manager for ABCESS is reviewing Matawan's written risk management policy to see whether it is significantly different from ABCESS' own risk management policy. One area of significant difference may relate to the maximum amount of losses from events that ABCESS and Matawan are willing to retain.
a) Give reasons why the maximum retentions may differ significantly between ABCESS and Matawan.
b) Identify other areas in which there may be significant differences between the two statements of risk management policy.
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