Peter C. Young

Risk financing in UK local authorities: is there a case for risk pooling?

Purpose – Since the early 1990s there has been a growth in local authorities of risk management. However, despite a range of different strategies, initiatives and practices the issue of financing the risks to which authorities are exposed has remained problematic. The traditional dependence on the commercial insurance market has proved to be a flawed strategy. This paper aims to analyse an alternative risk financing strategy which has been successful in local authorities in other countries, that of risk pooling.Design/methodology/approach – The paper analyses the rationale behind risk pools, investigates the legislative environment that appears to make these acceptable to central government and evaluates the likely benefits to local authorities of their adoption.Findings – The paper finds that the perceived main legislative barrier to risk pools may no longer exist. Given that, there is a strategic, financial and operational case to be made for at least exploring the possibility of risk pooling. The exper...

Risk and the Outsourcing of Risk Management Services: The Case of Claims Management

Outsourcing of risk management activities is a well-established practice, involving a range of services from actuarial audits to loss control training to risk financing management to claims administration services. Surprisingly, little work has been done to examine the risks associated with outsourcing risk management activities. This article examines the outsourcing of claims management services by reviewing the research on outsourcing risks and by interviewing leading practitioners. In doing so, the authors draw some provisional observations about risks and risk costs associated with outsourcing claims management services—observations that seem generalizable to all risk management outsourcing.

Government Risk-Financing Pools: An Assessment of Current Practices

Since 1970, state and local governments have experienced two “insurance crises;” the first occurred in the mid- to late-1970s and the second in the mid-80s. The result has been a twenty-year period of time in which state and local governments have been able to afford insurance only intermittently-if insurance has been available at all. In response to this problem, local governments, government associations, and state governments created alternative risk-finartcing mechanisms to provide coverage for themselves. These mechanisms, commonly referred to as self-insurance pools, enable local governments within a state to pool together risks and resources to finance the costs of fortuitous losses. In 1988, the first comprehensive examination of pooling practices was undertaken through a nationwide survey. This article reports the findings from the first follow-up study since the 1988 survey and further extends knowledge of pooling and pooling practices.

Organisation Risk Management in UK Police Authorities: An Integrated Management Approach

Risk management is evolving into a broader, more general, management role in organisations. This emerging form, called organisation risk management (ORM), seeks to manage all organisation risks in an integrated, comprehensive and strategic manner. The public sector has been somewhat slow to adopt both this view and practice, but changing political, social and economic pressures are forcing public authorities to provide better services with increasingly limited resources; and these pressures, in turn, are heightening the awareness of the value in managing the cost of risk. This paper introduces and develops the ORM concept, and provides a specific application that is a critical issue for the modern police authority — employment risk. In discussing this employment risk, the paper offers both a method for analysing risks generally and a set of risk management principles that apply to the actual management of all organisational risks.