Principles of Risk Management and Insurance, 13th Edition

Summary

• Risk management is a process to identify loss exposures faced by an organization or individual and to select the most appropriate techniques for treating such exposures.

• Risk management has several important objectives. Pre-loss objectives include the goals of economy, reduction of anxiety, and meeting legal obligations. Post-loss objectives include survival of the firm, continued operation, stability of earnings, continued growth, and social responsibility.

• There are four steps in the risk management process:

  • Identify loss exposures.

  • Measure and analyze the loss exposures.

  • Select the appropriate combination of techniques for treating the loss exposures.

  • Implement and monitor the risk management program.

• Risk control refers to techniques ...