Elite Academic Institute 068 053 8213 /0717 513 14/ 061 262 1185
ademic In
Ac sti
te
tu
Eli
te
W
er
de
a
h
eG M
raduates Ar e
Educating the world for a better change
,Elite Academic Institute 068 053 8213 /0717 513 14/ 061 262 1185
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore, the documents provided here including past assignments, tests
and notes are intended SOLELY for educational purposes and as a guide to help
students understand academic concepts and improve their writing skills. These
materials should not be submitted as final work, as doing so may constitute academic
dishonesty. Students are encouraged to use them as reference points, develop their
own understanding and produce original work that reflects their knowledge and critical
thinking. Students are also encouraged to regenerate their own (personalized)
solutions paying particular attention to module contents as prescribed by module
facilitators, lecturers and supervisors. If this document is plagiarized by the users and
fails, ELITE ACADEMIC INSTITUTE should not be rendered accountable since the
contents in this document only give learners a kick-start on what is expected of them
from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE ALL THE INFORMATION IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMENT
Educating the world for a better change
, Elite Academic Institute 068 053 8213 /0717 513 14/ 061 262 1185
Question 1 – Cost of Risk
The total cost of risk (TCOR) is the sum of all costs an organisation incurs in managing its risk
exposures:
TCOR = Insurance (risk transfer) premiums + Retained losses + Risk control costs +
Administrative costs + Cost of capital
Innovative Solutions Ltd's cost of risk is calculated below on this basis.
Amount
Cost of risk category Item / basis of calculation Calculation
(R)
A. Risk transfer costs General insurance premiums
(commercial insurance (property, furniture, R1 200 000 × 14 400
premiums & statutory equipment, business 12 000
cover) interruption, liability)
UIF contributions (statutory R380 000 ×
4 560 000
unemployment cover) 12
Compensation for
Occupational Injuries and R480 000 ×
5 760 000
Diseases (COID) 12
contributions
24 720
Subtotal A
000
B. Cost of retained losses
Laptop theft – excess borne by
(uninsured losses & 120 × R5 000 600 000
organisation (120 claims)
excesses)
Vehicle accident damage –
excess borne by organisation 25 × R7 000 175 000
(25 claims)
Educating the world for a better change
ademic In
Ac sti
te
tu
Eli
te
W
er
de
a
h
eG M
raduates Ar e
Educating the world for a better change
,Elite Academic Institute 068 053 8213 /0717 513 14/ 061 262 1185
WARNING: PLEASE NOTE THAT PLAGIARISM IS A SERIOUS ACADEMIC
OFFENSE, therefore, the documents provided here including past assignments, tests
and notes are intended SOLELY for educational purposes and as a guide to help
students understand academic concepts and improve their writing skills. These
materials should not be submitted as final work, as doing so may constitute academic
dishonesty. Students are encouraged to use them as reference points, develop their
own understanding and produce original work that reflects their knowledge and critical
thinking. Students are also encouraged to regenerate their own (personalized)
solutions paying particular attention to module contents as prescribed by module
facilitators, lecturers and supervisors. If this document is plagiarized by the users and
fails, ELITE ACADEMIC INSTITUTE should not be rendered accountable since the
contents in this document only give learners a kick-start on what is expected of them
from their areas of specialty.
CAUTION: STUDENTS ARE NOT MANDATED TO USE ALL THE INFORMATION IN
THIS DOCUMENT IN WRITING THEIR ASSIGNMENT
Educating the world for a better change
, Elite Academic Institute 068 053 8213 /0717 513 14/ 061 262 1185
Question 1 – Cost of Risk
The total cost of risk (TCOR) is the sum of all costs an organisation incurs in managing its risk
exposures:
TCOR = Insurance (risk transfer) premiums + Retained losses + Risk control costs +
Administrative costs + Cost of capital
Innovative Solutions Ltd's cost of risk is calculated below on this basis.
Amount
Cost of risk category Item / basis of calculation Calculation
(R)
A. Risk transfer costs General insurance premiums
(commercial insurance (property, furniture, R1 200 000 × 14 400
premiums & statutory equipment, business 12 000
cover) interruption, liability)
UIF contributions (statutory R380 000 ×
4 560 000
unemployment cover) 12
Compensation for
Occupational Injuries and R480 000 ×
5 760 000
Diseases (COID) 12
contributions
24 720
Subtotal A
000
B. Cost of retained losses
Laptop theft – excess borne by
(uninsured losses & 120 × R5 000 600 000
organisation (120 claims)
excesses)
Vehicle accident damage –
excess borne by organisation 25 × R7 000 175 000
(25 claims)
Educating the world for a better change
