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Why risk management?
In an uncertain and complex world, it is more critical than ever for organizations to manage risk holistically using the right combination of innovative strategies and solutions to eliminate or reduce it whenever this is possible.
Having a robust risk management process in place is critical for smooth business operations. An effective strategy and risk-alert business culture will make your organization resilient and agile when faced with any crisis or major change.
At Assurein Insurance, we have an experienced team that takes an enterprise-wide approach, consulting closely with you to identify, analyse and manage the broadest possible range of business and individual risk.
We assist our clients in assessing the full spectrum of their risks and developing customized strategies to address them and reduce Total Cost of Risk so that they can focus on their overall business goals.
Our key focus is on strategic advice. We innovate solutions across a wide range of insurable and non- insurable risks with the goal of understanding your business needs, quantifying your risk , implementing effective risk control strategies, reducing total cost of risk, claims management and reduced premium costs.
WHAT YOU NEED TO KNOW
STEP 1. RISK IDENTIFICATION
This is the single most important function and the one most often slighted or only paid lip service. Without this step, there is no rational way to put in place a meaningful risk management program. Identify all the potential risks your organization might encounter in its operating environment - regulatory, legal, environmental, market, and so on. They can be classified into four major categories of risks namely hazard risks, strategic risks, financial risks and operational risks.
STEP 2. RISK ANALYSIS
Risk analysis or risk assessment is where all the risks compiled in step 1 above are analysed and categorized based on two factors: probability of occurrence and potential impact. There are also two types of risk assessment: qualitative and quantitative assessment. Qualitative Risk Assessment analyses the probability and impact of the risk. Quantitative Risk Assessment analyses the financial impact of the risk.
STEP 3. RISK PRIORITIZATION
Here we prioritize the identified risks based on how critical they are. This is done by looking at the likelihood of each risk happening and the impact it might create on the business and assigning them an appropriate rank. So, a risk that would cause a little inconvenience but not disrupt business operations much is given a low rank while one that can bring the entire business to a standstill would be ranked the highest.
STEP 4. RISK TREATMENT
Once you have ranked the risks, the next step is to begin treating the risks in the order of their rank. This is where you create and implement your risk management strategy. Starting with the highest priority risk, you can examine possible solutions to mitigate or reduce each risk and choose the solution that is both effective and affordable. While it's not possible to anticipate and prevent every risk, the above steps should help you identify the changes you can implement to reduce most risks. There are four possible response strategies you can implement – Risk Acceptance, Risk Avoidance, Risk Mitigation or Risk Transfer.
STEP 5: RISK MONITORING
The final step is to document the strategy to ensure that all the planned measures are implemented as intended. But the work doesn't end there. Risk management is a continuous process, especially since the risk landscape is constantly changing. Constantly monitor both the results of your risk control strategy and any new risks that arise, making improvements to your risk management process wherever necessary. To make your risk monitoring effective, be proactive rather than reactive in keeping track of risks. Continuously monitor what's going on and thoroughly investigate any incidents that do take place and effectively communicate to your teams. Working closely with our clients, we develop bespoke Risk Management Reviews and provide advice in the following areas - Fire Risk Management, Security Controls, Employers and Public Liability Claims Management, Flood Management, Fleet Risk Management, Business Continuity and Claims Defensibility.