1 lenders is also an option Swift Corporation

1 .Advantages

1.      The Swift Corporation is encouraged
to embrace loss prevention

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2.      Swift
Corporation will notice an increase in their expense savings.

3.      With
actual losses lower than the loss allowance in the insurer premium, Swift Corporation
is bound save more money.

4.      Swift Corporation will notice increase
in cash flow as they have access to cash which is typically held by the insured

Disadvantages

1.      The
loss allowance in the insurance premium which is saved by not procuring insurance
may be less than the losses retained by the Swift Corporation, thus creating a
huge volatility in the firm’s loss experience in the long run.

2.      Introduction
of loss prevention programs which insurer can provide at fair prices, because
the expenses may be higher than imagined.

 

 

 

1.      The
company tax aspects

2.      The
average frequency and the level of severity of the company losses.

3.      Consistency
of the losses

4.      The
full amount of losses to be retained by the company

5.      Extra
cost in relation to the retention of loss like administrative issues.

6.      The
total past losses incurred by the company.

7.      Confirm
incase the management of Swift Corporation are risk averse

 

There different methods Swift Corporation can use to
pay up for the physical damages. The company can approach a captive insurer to
help in this case. Another option is to pay out from the current net incomes of
the company. Borrowing funds from commercial lenders is also an option Swift Corporation
may take into account when trying to find solution to this problems.

 

 

 

4

1.      Swift
Corporation should avoid employing drivers with tainted driving experiences with
history of poor driving skills and accidents

2.      The
company needs to go level higher by ensuring all drivers undergo through a
defensive driving course to reduce the losses and physical damages.

 

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