Question

Risk Management Techniques

What is Loss Diversification techniques that the government has applied to manage the risk of Dengue?

Answer 1

Severe dengue has a higher risk of death when not managed properly. There is no specific treatment for severe dengue. Only proper medical care lowers it out.

Diversification is a technique that reduces risk by allocating proper investments in industries and other categories.It is an important component to achieve long term goals by minimizing risks.

There are mainly two types of risks - diversifiable and undiversifiable. Diversifiable is unsystematic risk and is specific to company, industry, economy. It can be reduced through diversification. Undiversifiable is systematick risk which is caused due to inflation rates, interest rates. It cannot be reduced through diversification.

In order to manage risk of dengue, government may adopt below diversification techniques:

Insurance: Insurance can prevent from loss due to dengue treatment expenses. It can be helpful to patient as well as economy. Patient can reimburse his or her expenses from the insurance company in which he or she is insured. In the same way, government can be take insurance for citizens.

Prevention: Government can run certain advertisements which can give message to citizens as to how to prevent from dengue, what precautions can be taken against same.

Avoidance: Government takes care that the possibilites that may cause dengue are not avoided in any circumstances.