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... people as economic machines: Their life is the machine, their health is the maintenance of the machine, and their income involves the production of the machine. &# 160 The task of risk management is to protect a person, or business, against exposure to loss. &# 160 Five types of "bad" can happen to people: Premature death Unplanned aging Accident or sickness Unemployment Other contingencies — divorce, behavioral problems, bankruptcy, etc. Two types of "bad" can happen to things: Destruction of or damage to property and loss of its use, or Lawsuits. &# 160 The potential loss determines the best method to handle the "bad." Losses are defined by frequency (how often) and severity (how bad) . The options in loss control ... . Our legal system is addicted to huge amounts of cash and will continue to find new ways to feed this addiction. &# 160 Our health care system is out of control. We spend about $5 ,035 per person on Health Care (HC) . The inflation of HC costs could double the average Health insurance premium within three to five years. HC costs drive much of our WC, Casualty, and Group Benefits premiums. These cost trends, combined with the aging Baby Boomers and our growing societal entitlement mentality, will continue to accelerate unless we can encourage HC users to become responsible buyers. In yesterday's world, a business could mass market effectively based on a cost driven pricing model. Today, as Peter Drucker pointed out, companies must mass customize for a "niche ...

... years. HC costs drive much of our WC, Casualty, and Group Benefits premiums....