5. Explain the following English words and word combinations in your own words.

Garbage in, garbage out, worst-case scenario, best-case scenario, forefront of a company, less tangible risks, to canvas opinions, to eschew mathematical modelling, credibility, down-to-earth thinking.

6. Decide which of the following statements are right and which are wrong. Give the correct variants.

1. Scenario analysis enables managers to establish a range of different outcomes depending on various decisions and actions.

2. To reach a consensus management could use a voting keypad enabling executives to elect the level of threat they attach to different hazards.

3. As particular hazards come to the forefront of companies’ and insurers’ minds, so risk management tools are being applied to man-made disasters.

4. The computer technique is mainly used to calculate losses from natural catastrophes, such as hurricanes.

5. An array of sophisticated tools negates the need for more down-to-earth thinking, because these tools are substitute for judgement and common sense.

6. Some threats, such as shifts in competition or damage to a company’s reputation are less tangible and much harder to measure.

7. As companies today face myriad risks to their operations, so there are a few techniques to help them to measure risks they face.

8. Complex mathematical and statistical analysis are very subjective if we compare them with web-based systems.

7. Make up your own sentences using the words and word combinations given below.

To face myriad risks to operations, to measure threats, to canvas opinions, to meet changing needs, to estimate impact from potential disaster, to calculate losses from natural catastrophes, to set aside against a particular risk, to reach a consensus, to feature scenario analysis, to eschew mathematical modelling, to replicate full scale warehouse fires, risk mitigation measures, to negate the need, to attach a greater credibility to the number, to back up.

8. Pharmaceutical firms are being held liable for illnesses caused by shots given for childhood diseases. Diphtheria-tetanus-pertussis (DTP) vaccine saves thousands of lives each year, but a few children get sick and die from the shots. Consequently, to avoid lawsuits, many pharmaceutical companies are refusing to produce the serum. This could mean the return of childhood diseases if something isn’t done about the problem. Who pays in the long run for huge rewards for injuries?

Physicians, especially, obstetricians who deliver babies, must pay up to $60,000 a year for malpractice insurance. Is this a case of the courts being too strict, or is it merely a good example of the government (in the form of judges) protecting the consumer in a reasonable and prudent manner?

9. Prepare the report: The difference between pure and speculative risks, how they can be covered by insurance.

FINANCIAL TIMES OCTOBER 27 2004