Page 5 - RISK Management IC86 Ebook
P. 5
The Insurance Times
Chapter - 1
Risk and Theory of Probability
Risk Concepts
l Risks can be identified, measured, controlled and financed;
this is the fundamental principle of the discipline of 'Risk
Management'.
l Risk is existing and or being everywhere at the same time and
is constantly encountered.
Meaning of risk
l To the ordinary man in the street "risk" means exposure to
danger
l Concise Oxford Dictionary defines risk as, "Risk: hazard,
chance of bad consequences, loss etc exposure to mischance."
l Chamber's English Dictionary defines risk as ,"Risk: hazard,
danger, chance of loss or injury the degree of probability of
loss a Person, thing or factor likely to cause loss or danger.
l So risk is something or some event that can cause harm or
loss; in a broad sense, it is the exposure to events which
cannot be predicted with absolute certainty.
To understand the severity of a risk, risk is often analyzed for
probability; the higher the chance that it will happen the higher
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