CPCU 500 - Chapter 1 Questions & Answers

CPCU 500 - Chapter 1 Questions & Answers ERM (enterprise risk management) The comprehensive process of evaluating, measuring, and mitigating the many risks that pervade an organization. Big Data Capture, storage, and analysis of data Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:04 / 0:15 Full screen Brainpower Read More Smart Products Sense their environment, process data, and communicate with other smart products and smart operations Internet of Things (IoT) A network of objects that transmit data to and from each other without human interaction Cloud Computing Info, technology, and storage services contractually provided from remote locations, through the internet or another network, without a direct server connection Blockchain A distributed digital ledger that facilitates secure transactions without the need for a third party - aka. system of verification and confirmation - maintains a continuously growing list of records (blocks) in chronological order; a new block is created each time a transaction occurs Mining Consensus process that confirms and verifies - removed intermediary validation and establishes trust without a centralized authority 4 examples of data-driven decision making 1. Telematics 2. Discovering new relationships in data 3. Text mining 4. Developing new products Telematics The use of technological devices in vehicles with wireless communication and GPS tracking that transmit data to businesses or government agencies; some return information for the driver. Text Mining Obtaining info through language recognition Insurtech The use of emerging technologies in the insurance industry - reduces the uncertainty associated with predicting future events Sensor A device that detects and measures stimuli in its environment - an IoT object that collects and transmits data - they assess risk by detecting and measuring objects or conditions on a continuous basis, which provides early warnings Preventive Analytics Statistical and analytical techniques used to influence or prevent future events or behaviors**Preventive analytics uses smart products and data analytics to identify root loss causes and their implications. The risktech ecosystem includes what 4 things? 1. Emerging tech 2. Smart products 3. Smart operations 4. Big data analytics Deep Learning An extension of AI that attempts to understand and mimic neural networks in the brain through software that simulates image and speech recognition Transducer A device that converts one form of energy into another Actuator A mechanical device that turns energy into motion or otherwise effectuates a change in position or rotation using a signal and an energy source. Accelerometer A device that measures acceleration, motion, and tilt. Computer Vision Technology that simulates human vision - it recognizes an object, gives the object context, and responds to it as a human would - used in automobiles - involves detecting, extracting, and analyzing images to better understand them 3 common smart products 1. Wearables 2. Drones 3. Robots Ergonomics The science of designing the workplace as well as its equipment and tools to make specific body movements more comfortable, efficient, and safe - wearables are designed with this Businesses are making investments in their big data infrastructures. How are these investments laying the groundwork for the continued evolution of the risk management landscape? Businesses' investments in big data infrastructure are laying the groundwork for the continued evolution of the risk management landscape in ways that include empowering organizations and their risk management professionals to better access and analyze data and to more efficiently and quickly conceive, develop, and distribute products. How does data capture work? Data capture is enabled primarily by smart products that sense their environment, process data, and communicate with other smart products and smart operations through the Internet of Things (IoT). Name some smart products being used in risk management today A variety of smart products are being used in various industries to assess and control risk. Some of the most common include wearables, drones, robots, and smartphones. Abhinav is a supply chain manager for an automotive manufacturer. He is concerned about how the forecasted winter will affect supply. How could smart products address his concerns? Sensor data could inform Abhinav when weather conditions have interrupted the production of parts, allowing him to quickly make adjustments in shipments and deliveries. How do sensors assess risk? Sensors assess risk by detecting and measuring objects or conditions on a continuous basis; this provides early warnings of impending problems or malfunctions and determines whether expected results have occurred. A financial institution is looking to implement an emerging technology that can identify a trader who is committing the institution to excessive financial risk and respond with built-in financial circuit breakers to limit the risk. Which emerging technology would the financial institution want to implement? Artificial intelligence (AI) would be the emerging technology to implement for this purpose. AI refers to the ability of machines to simulate human intelligence, and it trains machines on the nuances of sources and the causes of various risks, then establishes automatic responses based on a set of rules. Name the types of information that smart products are helping risk managers obtain. Smart products are increasing the information risk managers have on hand—information about dangerous chemicals in the air, shipping malfunctions, exhausted workers, and almost any other facet of an organization's operations. Juan is the property manager of multiple shopping centers. He wants to invest in smart operations to save costs and labor in the long term. What are some smart products Juan could invest in? Juan could invest in drones for surveillance and monitoring of damage and security risks at his different locations. He could also automate the leasing process through the use of robots to process documents and payments and answer property-related questions. 5 pieces of the connected ecosystem 1. Property 2. Supply chain 3. Transportation 4. Catastrophe 5. Workplace Southwest Interstate Railroad (SIR) is concerned about the number derailments in recent years. It's not cost effective to use human assets to inspect tracks, bridges, and trestles. Instead, SIR has started to use drones. A drone can fly low over tracks and above/below bridges and trestles. The drones record video that is transmitted to corporate headquarters where it is simultaneously scanned for derailment hazards. In the past six months, the drones detected a track blockage caused by a rock slide and damage to tracks in a remote area cause by an earthquake. SIR dispatched work crews to make the tracks once again passable, and no derailments occurred. SIR's use of drones, video, real-term video scanning, and computer analysis illustrates which one of the following? Preventative analytics