Professional Documents
Culture Documents
INDEX
Particulars
1. What is Risk?
2. Classification of Risk
3. Iceberg of Losses
4. Risk Management
a. Introduction
a. Risk Analysis
b. Risk Control
c. Risk Transfer
d. Risk Financing
e. Rolling Review
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7. Case Study
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WHAT IS RISK??
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policyholder to know or have any direct connection with
any other policyholder
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CLASSIFICATION OF RISKS
SPECULATIVE RISKS
Operation is desired
PURE RISKS
Not desired
DYNAMIC RISKS
STATIC RISKS
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Like pure risks these risks remain static and do not change
due to other reasons like that of dynamic risks
PARTICULAR RISKS
FUNDAMENTAL RISKS
ACCEPTABLE RISKS
NON-ACCEPTABLE RISKS
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• Major risks are non-acceptable
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ICEBERG OF LOSSES
Uninsured losses are simply the costs that are not covered by
any insurance policy.
• Loss of Life/Health
• Loss of Property
• Loss of Goodwill
• Loss of Market
• Loss of customers
• Loss on investment
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RISK MANAGEMENT
INTODUCTION
Every organization is exposed to various risks. While many of
them are pure risks like fire, explosion, chemical release etc.,
some of them are speculative. Pure risks are handled as
operational and safety issues by professionals and finance
personnel have to address the risks arising out of failure of
above operational and safety measures. Together they need to
ensure that the organization is able to withstand any risks or
failure of systems and can continue its operations without
much struggle.
DEFINITION
Risk Management is defined as the systematic way of ensuring
protection of business resources and income against losses so
that the aim , goals and vision of the company can be reached.
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OBJECTIVES
Broadly the Risk Management studies are conducted with the
following objectives
• To ensure that the goals short term and long term are
achieved without any disruption or delay
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• Protecting the environment.
• Reducing liabilities.
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DEVELOPMENT OF RISK MANAGEMENT
The Industries / Business houses want to have incident
free/ accident free working to achieve their objectives
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RISK MANAGEMENT PROCESS
PERIL ( CAUSE)----------------LOSS(EFFECT)
HAZARD
CAUSES OF LOSSES
Perils- such as fire, explosion etc
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Extraneous: Accidents involving Gas or chemical in
nearby units
TYPES OF LOSSES
Property losses- losses which can happen to the Assets
HAZARD
Hazard is defined as conditions existing which are favourable
for the loss becoming severe
CLASSIFICATIONS OF HAZARD
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STEPS IN RISK MANAGEMENT PROCESS
Investigate by
Study
Inquiry
Document review
Physical Inspection
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RISK EVALUATION
EVALUATION METHODS
• EVALUATION OF RISKS-THREAT
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ADOPTION OF LOSS CONTROL MEASURES
RISK AVOIDANCE
• This is also known as Risk Elimination
RISK CONTROL/PLANNING
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Identify risks, review/assess their intensity and document
the risk owners.
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Incorporation
Diversification
Hedging
Insurance
V. ROLLING REVIEW
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You need to measure the effectiveness of risk profiles and
update as necessary.
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CONTRIBUTIONS OF RISK MANAGEMENT TO
THE BUSINESS
Reduction of expenses
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A CASE STUDY
CHEMICAL PLANT
1. Site selection
2. Improper Layout
3. Risk assessment
a. storage
b. fire protection
c. toxicity
f. compatibility
b. equipment
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d. quality testing tools
e. removal of fugitive
f. emissions
5. Electrical safety
b. electrical fittings
d. lightening arrestor
6. Safety Audits
a. conceptual stage
b. extension stage
d. operation stage
e. periodic
7. Emergency Planning
a. on site
b. off site
8. Training
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9. Implementation
If Manageable
Proceed
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