Casualty Actuarial Society (CAS) Practice Exam

Which of the following is NOT a category of insurer risk control activities?

1. Conducting physical surveys

2. Developing safety management programs

3. Making claims payments

4. Performing risk analysis and improvement

The correct answer is: Making claims payments

The option that is not categorized as an insurer risk control activity is making claims payments. Insurer risk control activities primarily focus on preventing losses and reducing risks before they occur. These activities include conducting physical surveys to assess risks, developing safety management programs to implement practices that mitigate risk, and performing risk analysis and improvement to identify potential areas for enhancement in risk management strategies. Making claims payments, on the other hand, is related to the insurer's financial response after a loss has occurred, rather than an activity aimed at controlling or mitigating risks beforehand. This process is part of claims management, which deals with the aftermath of risk events rather than their prevention. Therefore, it does not fit into the framework of risk control activities, which are proactive by nature.