what is risk-management?

Risk-management refers to all techniques used to reduce occurrences of unfavorable events. That could cause bodily harm or financial losses. What are these unfavorable events?

  1. Burglary.
  2. Fire.
  3. Road carnage.
  4. Employee infidelity.
  5. Pilferage.
  6. Floods occurrence.
  7. Unstable economy.
  8. Bad debtors increasing.

Why is Risk-management highly recommended?

Well, risk management is very important. Read this.

  1. Society builds disaster preparedness. In-case floods occur or lightning become more prevalent.
  2. Fund managers reduce chances of investment value decreasing by hedging their funds.
  3. Commercial banks keep afloat by requiring security for loans from borrowers.
  4. Airlines ensure airplanes  are safer for short and long distant flight.
  5. Homeowners ensure their home are burglar free.
  6. Supermarket owners strive to minimize pilferage.

Features of risk management.

Risk management is an ongoing activity in the society.

Business people are always alert in identifying possible risk exposures.  They base their studies on historical events. And then model on the successes and failures of past risk mitigation measures.

Hazards increase chances of losses

  1. Faulty power lines could trigger fire or electrocution of an individual. Therefore firms ensure that all wiring are done properly.
  2. Sheltering under a tree while it is raining is not wise. You risk inviting trouble when lightning strikes.
  3. Driving at 129km/hr is great but when you bang onto a corner it will turn into tears.

Benefits of risk-management.

  1. Losses are minimized.
  2. Fund managers will reduce financial losses when they hedge fund.
  3. Commercial banks will increase profitability when borrowers pay up.
  4. You will live with peace of mind when you minimize possible bodily harm. Like not walking  from town alone at night.
  5. Professionals become more trusted when they adhere to good conduct.

Four ways of managing risk.

  1. Training medical employees on professional ethics and its importance in client safety.
  2. Avoiding common negligence that can cause burglary and bodily harm.
  3. Taking up insurance cover with an insurance company.
  4. Setting up your own measures to combat risk.

Skills utilized by risk managers.

  1. Statistical skills used in studying historical data.
  2. Mathematical skills needed in computing variances and probability of risk occurrences.
  3. Creativity comes in handy in developing risk management techniques.
  4. Computer skills are necessary when working with statistical packages to analyze data.

Are there risk management services?

Yes, there are risk management services.

For instance, insurance. Where you take out a policy and share risk with the insurance company. It’s simple and straight forward. Just approach an insurance broker for more details.

Success of risk management.

In my own view… risk management is successful.

  But according to AON?

Insurance is very important.

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