Question

An insurance company decides to offer individuals insurance against losing their jobs. What problems is it likely to encounter. (Risk management course)

Answer 1

There are several problems to be faced:

1. Determining the premium to be paid for the insurance. Developing a criteria for blue collared and white collared job, the demand/need for the skill that the individual has and its impact.

2. Factors that results in the individual being let go of the job. Determining if the cause is afraid, unethical transaction behaviour.

3. The need for such a product: if there is a demand for the product where is it originating from, the possible growth by entering into this sector, the cost of paying the insurance in case the policy is activated.

4. Severance pay: most companies offer employees severance pay till the point the employee can find a new position, if that facility is available, how useful will this policy be.