Page 16 - RISK Management IC86 Ebook
P. 16
Risk Management
Risk Treatment : Elimination, Reduction, Limitation, Transfer.
Risk Financing : Deductible, Self insurance.
Risk Management Approach
l Managing risks within a company implies a threefold approach-
A) Formal system of risk threat:-
n Identification/anticipation
n Measurement/evaluation/assessment
n Control
n Recording information and decisions
n Monitoring results.
B) Adopting measures for economic control that either-
n Produce a measurable reduction in overall cost of risk,
n Noticeably reduce the possibility of both everyday working
risks and catastrophe loss &/or
n Help to ensure the company's survival whilst minimizing
the cost of risk control.
C) Establishing management responsibilities for risks.
The potential for applying risk management is very wide. Apart
from insurable risk area it includes -
n Commercial risks - evaluating trade-off between risk &
return,
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