CAS Practice Exam 2026 – Complete Study Guide

The option that describes how risk control contributes to lowering losses is the accurate assessment of loss exposures. This process involves identifying, analyzing, and predicting potential risks and their impacts on an organization.

When loss exposures are accurately assessed, organizations can implement targeted risk control measures to mitigate these risks effectively. For instance, if certain activities or processes are identified as high-risk, appropriate safety protocols, training programs, or operational changes can be introduced to reduce the likelihood or severity of losses. This proactive approach plays a significant role in preventing losses before they occur, thereby protecting both the organization’s assets and its financial health.

In contrast, the other options do not effectively contribute to lowering losses. Reducing operational capabilities can negatively impact productivity and efficiency, potentially leading to greater susceptibility to losses. Eliminating safety protocols would typically increase risk exposure rather than lower losses, as it removes protective measures designed to prevent accidents or incidents. Lastly, increasing risk acceptance does not contribute to loss reduction; rather, it signifies a willingness to take on more risk, which could ultimately lead to higher losses if the risks materialize.