recent survey in the UK highlighted large discrepancies between the insured and the uninsured costs of losses, demonstrating that the true cost of risk is much higher than previous estimates. .[ CITATION Rei95 \l 1033 ]Argued that risk is never totally transferred by insurance, and if insurers recognize that they retain a partial ownership of risk, there is a greater likelihood that there will better loss control. However, there are two distinctive approaches to risk management which include; the traditional and strategic approaches. The traditional approach of risk management is based on a process that aims at identifying, measuring and treating exposures to potential accidental losses. This focus on the negative impact of risk and as a consequence- is based on assessing the probability of the loss frequency and severity .Williams/ Heins (1994), cited in [ CITATION Wie14 \l 1033 ].The risk treatment methods are directed to either reduce the loss frequency or loss severity which is conducted by the application of risk control tools including; risk avoidance, risk prevention or repression and financial control tools such as risk retention and transfer in particular, the insurance risk transfer. Loss control, claim analysis and optimal insurance coverage remain prime areas of managerial concern. The strategic approach of risk management on the other hand is perceived as an essential revolution of the ideas of risk management Baranoff 2004; Chapman 2006:4 cited in [ CITATION Wie14 \l 1033 ]. This approach is often referred to as a holistic or integrated approach that focuses on both the down side and upside of risk. The integration of risk management postulates to perceive the problem of risk in a holistic manner and assume the interdependencies of risk rather than so called ‘silo’ (that is piecemeal) approach. This approach to risk management is also based on more advanced risk management techniques compared to those in the traditional concepts. It addresses both the advancement in risk analysis techniques
most notably the application of quantitative analysis and risk based indexes and risk treatment techniques. According to Culp 2002:13-14; cited in [ CITATION Wie14 \l 1033 ], the later trend is caused by the growing integration between the capital market and the insurance market and the use or application of new risk management techniques appearing such as Alternative Risk Finance (the ARF) instruments. To what extent have these tools and techniques of control been managed effectively to ensuring profitability of the insurance companies in Ghana?[ CITATION Bom05 \l 1033 ]Stated that only if risks are robustly quantified and measured is it possible to set benchmarks that treats the different line of business and affiliates in different jurisdictions in a fair way, and only then is it possible to detect value creating and value destroying businesses and to formulate appropriate strategic mechanisms of response around these insights. However, in the review of relevant and
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