Page 9 - RMAI BULLETIN Oct - Dec 2019

RMAI BULLETIN OCTOBER TO DECEMBER 2019

RISK MANAGEMENT

SYSTEM MUST

PREVAIL IN INDIAN

INSURERS’ MARKET

OPERATIONS Anabil Bhattacharya

B.M.E. (Honours), F.I.I.I.,
Risk Inspecting Engineer & Insurance Counselor,
E National Insurance Co. Ltd., KOLKATA.
Retired Chief Manager, H.O.,

E Prologue: than NIA) must be concerned with their individual

entity regardless of their position after merger – so
Business risk is generally defined as the menace posed
by an event or action to a business's ability to achieve
towards this direction in regard to their Insurance
its enduring objectives. For many insurers the primary there is a dire need for their own self introspection
objectivewillbemaximizationofprofit,sobusinessrisk businessRisksManagement.
can be thought of as anything that will prevent the
Risk management, according to Bernstein is the
company making as much profit as possible. Since the
dividing line between modern times and the past.
opposite of huge profits is huge losses and companies
According to him “The ability to define what may
making huge losses will generally go out of business,
happen in the future and to choose among alternatives
business risks can be considered as being forces
lies at the heart of contemporary societies. Risk
pushing a company in the direction of going concern
management guides us to choose over a vast range of
problems. This will not mean that a business risk will
decision-making, from allocating wealth to
automaticallyleadtogoingconcernproblems.
safeguarding public health, from waging war to
If a company is performing well and suffers a 4% drop in planning a family, from paying insurance premiums to
wearing a seat belt, from planting corn to marketing
sales it will inevitably make less profit but is unlikely to
go out of business. Consequently, the importance of cornflakes”. Risk management is a process with the
corporate governance and assurance continues to objective of identifying risk exposures faced by an
individual / organization with a view to selecting the
increase and the most significant aspect of this topic is
risk management. As a result, risk management has best available technique for treating such exposures.
been catapulted from being a useful tool to becoming ThedefinitionofRiskManagementmayalsoinclude:-
1. Risk Management is ‘Economic Protection of
the very pulse of the organization and the yardstick by
Assets&EarningsagainstProbableLosses’
which management is judged. Even at the backdrop of
merger of PSUs – this year all the three PSUs (other 2. Risk Management is a discipline concerned with

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