Page 60 - RISK Management IC86 Ebook
P. 60
Risk Management
Unfortunately, many people are caught out by retaining risk,
and either they and/or their families suffer financial loss and
hardship.
STEP 3 : Selecting the best technique
n Ideally we would like to completely eliminate anything that is
of high risk. Although ideal, this is not usually possible as
eliminating all risk would also eliminate most of the business
opportunities.
Hence, after systematic consideration of various risk control
and risk financing options, the next step will be to select the
best option by considering what combination of risk control
and risk financing measures best serves the organization's
objectives.
Different organizations with same exposures but different
objectives will choose different combinations of the
techniques.
Such selection methodology will have to primarily look at two
steps, namely
l Forecasting the effects of available risk management
techniques on the organization's ability to fulfill its
objectives.
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