Page 2 - Insurance Surveyors Book Ebook IC S01

Survey And Loss Assessment IC-S01

Risk and Theory of Probability

Risk Concepts

 Risks can be identified, measured, controlled and financed; this is the

fundamental principle of the discipline of 'Risk Management'.

 Risk is existing and or being everywhere at the same time and is constantly

encountered.

Meaning of risk

 To the ordinary man in the street "risk" means exposure to danger

 Concise Oxford Dictionary defines risk as, "Risk: hazard, chance of bad

consequences, loss etc exposure to mischance."

 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.

 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 the risk. Probability is then

assessed in combination with loss.

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