Control activities Internal control co v er s all divisions and subsidiaries in the Group and includes methods and activities for securin g assets controllin g the accur ac y and reliabilit y of internal and e xternal fnancial reports and ensurin g compliance with defned guidelines Self assessment Ev er y ma jor oper atin g unit throug hout the Group per forms an annual self assessment which is part of the enterprise risk mana g ement process and includes the risks that require hig hle v el mana g ement at tention that are described on pre vious pa g es as w ell as other k e y risks includin g fnancial reportin g risks and mea sures and compliance with the Group policies and reportin g manual Self assessment promotes control a w areness and account abilit y The results are signed of and the sections related to fnancial reportin g are signed of b y each entit y s President and Controller and other parts are signed of b y the responsible function As part of this process the e xternal auditor and or another internal or e xternal resource per forms a v alidation of the ans w er s to ques tions in the ques tionnaire deemed to be risk areas for the selected reportin g units The ans w er s are compiled at divisional and Insur ance as a risk mana g ement tool A signifcant part of Securit as risk mana g ement w ork in v olv es detectin g and analy zin g frequent and lar g e losses with the aim of identif yin g the underlyin g drivin g forces W e w ork proactiv ely and implement claims mana g ement processes in or der to monitor and re view trends and de v elopments Claim reports with updated information on claims and reser v es are sent to all local risk mana g er s and controller s on a monthly basis and the claims are analy z ed R e gular meetin g s are also held with insur ance companies Throug hout Securit as w e set up loss pre v ention and loss limitin g measures as if w e w ere uninsured The Group s e xternal insur ance premiums are partly deter mined b y the his toric loss recor d Consequently a fa v or able loss recor d will contribute to lo w er premiums and a lo w er cos t of risk The insur ance progr ams are procured with the objectiv e of creatin g a balanced and cos t efcient protection a gains t ne gativ e fnancial impact Securit as seeks to achie v e economies of scale throug h coor dinated insur ance progr ams and the optimal utilization of the Group s insur ance captiv es The use of our insur ance captiv es ofer s a wide r an g e of risk fnancin g possibilities and pro vides mana g ement with an option to es t ablish some independence from the c y clical nature of commercial insur ance mark ets The design and purchase of all insur ance progr ams is based on the risk e xposure analy z ed in the business risk e v aluation model The follo win g t ypes of insur ance are s tr ate g ically import ant to the Group and are the subject of centr al pur chasin g liabilit y insur ance includin g a viation liabilit y and a viation w ar liabilit y crime insur ance director s and ofcer s liabilit y insur ance fduciar y insur ance and emplo yment pr actice liabilit y insur ance Cat as trophe e xposure is pro tected b y insur ance companies with a minimum r atin g of A St andar d Poor s Securit y Ser vices Europe Group Securit y Ser vices North America M obile and M onitorin g 2 Securit y Ser vices Ibero America C OS T OF RISK PROP OR TIONS 1 of sales Insur ance premium Local deductible Source Securit as 1 The purpose of this gr aph is to illus tr ate ho w cos t of risk proportions v ar y bet w een the v arious divisions dependin g on risk e xposure and ret ained cos t for frequenc y losses 2 As of 2013 M obile and M onitorin g is included in Securit y Ser vices Europe 44 Securit as Annual R eport 2012 G o v ernance and mana g ement Boar d of Director s report on corpor ate g o v ernance and internal control