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The company is implementing loss reduction by installing automatic sprinklers in all its facilities. Loss reduction techniques are aimed at minimizing the severity or impact of risks that have already been identified. By installing sprinklers, the company is taking proactive measures to mitigate the potential damage caused by fire, effectively reducing the potential financial loss and ensuring that their assets and employees are better protected.

This action does not eliminate the risk of fire altogether, but it significantly reduces the damage that could occur, showcasing a commitment to limiting potential losses. The focus here is on reducing the impact of an adverse event once it occurs, which is the essence of loss reduction strategies.

In contrast, other techniques such as risk avoidance would involve changing business practices to entirely eliminate the risk, which is not the approach taken here. Insurance procurement relates to transferring the financial risk rather than reducing it directly through preventative measures. Loss prevention would primarily focus on measures that prevent a fire from happening in the first place, while the installation of sprinklers is more reactive, mingling prevention with reduction of impact once a fire does occur.