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Risk and insurance management: 

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Risk definition:

A risk is the exposure to a potential danger, inherent in a situation or activity. Risk is inherent to man since any human enterprise involves risks.

Consequently, any activity must use relatively sophisticated processes to protect itself against risks, in order to succeed.
Today, our society emphasises this need, by institutionalising and industrialising risk management.

The risk within the enterprise:

It is a manager’s goal to develop and grow the activities of the enterprise and as such they will be concerned with the risks that may hinder this progression.

To a company, a risk is defined as a possible event that may lead to negative consequences for the organisation or the individuals. Its impact may put into question:
  • The existence of the company
  • Its resources (human or financial)
  • Its products and services
  • Its clients
On a larger scale, it may harm:
  • The market
  • The environment
  • The community
Within large enterprises, we often find specialised teams led by a risk manager.
These strategies go from transferring the risk to avoiding it and include the reduction of negative effects and acceptance of certain consequences.

Risk Management:

Risk management is an operational tool and an aid to strategic decision-making. It is the process of protecting the enterprise against uncertainties or more, the combination of techniques limiting the occurrence of hazardous events that may compromise its operation.

Risk management is an operational tool and strategic decisions-making aid.

Evolution of the profession:
Risk management constitutes an analysis and systematic identification approach relatively new in the economic world, aside from certain historical sectors such as maritime, nuclear, petroleum, chemical or aviation industries, ... but does not totally eliminate the risk!
Risk Management has become one of the major functions of a company: the capital market no longer forgives serious error, and Risk Management is now an integral part of the new regulations such as Sarbanes-Oxley Act or Bâle II.

Activity segmented in different and very distinct missions:
Risk management activity is structured in several stages that may vary from one company to another. However, it generally revolves around the following points:
  • Risk identification and analysis
  • Determination of management strategies and control measures
  • Frequent reporting
Tools available to managers:
The management of the information and data related to risks is without question one of the keys to success for the development of a risk management policy, whatever the size or activity of the organisation.
The Risk Management Information System for (RMIS) appears as the centralisation and consolidation tool for scattered data, allowing better follow-up of the activity and simplifying communication with the different intervening parties on the project.

Benefits for Head Offices:
There are many:
  • Detailed information on the threats, not distinctly perceived, that weigh on their company.
  • A formalised and shared risk inventory allowing the launch of specific actions and projects to control them (risk mapping is a widely spread method, implemented by 58,1% of the queried companies).
  • Appreciation of the sensitivity and responsibility of principal managers in from of the company’s risks.
The end of the study is available in PDF version to be downloaded.
It comprises a list of the major risks identified for the enterprises, a description of the different risk management methods (prevention, reduction, retention, transfer…) , a rapid historic of the risk management practitioner , a more detailed description of his contribution to the company and the way it blends with the rest of the activity.
A bibliography concludes the file with a list of manuscripts dealing with risk management.

Integral file to download
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