Kalpana & Mr. S.RISK MANAGEMENT Presented by: Ms. S. Vijay .

INTRODUCTION  Risk traditionally defined as uncertainty i.  The Risk Management process is helpful to minimize the loss exposures. . fluctuations in income.  Risk Management is helpful to managing and to control the risk.e.  Risk Management is a process that identifies loss exposures faced by an organization.

‡ Fundamental Risk . ‡ Speculative Risk .BASIC CATEGORIES OF RISK ‡ Pure Risk .that encompasses all major risk faced by a business firm. ‡ Particular Risk .that affects the entire economy or large numbers of persons or groups within the economy.a situation in which there are only the possibilities of loss or no loss.a situation in which either profit or loss is possible. . ‡ Enterprise Risk .that affects only individuals and not the entire community.

METHODS OF HANDLING RISK  Avoidance  Loss control  Reduction  Non-Insurance Transfer  Insurance .

.RISK MANAGEMENT A process that identifies loss exposures faced by an organization and selects the most appropriate techniques for treating such exposures. regardless of whether a loss occurs. A loss exposure is any situation or circumstance in which a loss is possible.

OBJECTIVES OF RISK MANAGEMENT Pre-Loss Objectives Post-Loss Objectives .

Analyze the loss exposures Select the appropriate techniques for treating the loss exposures 1. . Risk control Avoidance Loss prevention Loss reduction 2. Risk financing Retention Non-insurance transfers Commercial insurance Implement and monitor the risk management program.STEPS IN THE RISK MANAGEMENT PROCESS Identify loss exposures.

Risk Management Tools ‡ Risk Management Information System (RMIS) ‡ Risk Management Intranets and Web sites ‡ Risk maps ‡ Value at risk (VAR) analysis .

. ‡ The cost of risk is reduced which may increases the company·s profits.BENEFITS OF RISK MANAGEMENT ‡ The Pre-Loss and Post-Loss Risk Management Objectives are more easily attainable. ‡ The adverse financial impact of pure loss exposures is reduced.

. ‡ Each investor wants to minimize their risk. ‡ Risk Management Processes are helpful to identify loss exposures and to control it.CONCLUSION ‡ Thus risk management is a process that identifies loss exposures.


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