Integrated Risk Management Decision-Making: A Worker's Compensation Loss Exposure Case Study.

This paper shows how Sharpe's measure and some financial constraints can be used to choose the best combination of risk management tools to handle a workers' compensation loss exposure. Because the sample firm data were too limited to estimate with confidence the mean of the Poisson probability distribution used in the analysis, the results were subjected to a sensitivity analysis. For the sample firm excess insurance, together with the optimum loss control efforts, was the best combination, the ex-medical plan combined with optimum loss control being a viable alternative. [ABSTRACT FROM AUTHOR]