Understanding RiskChapter 1 Undertaking Risk   Intorduction to Insurance and Risk Management
Learning ObjectivesTo understand the concept of riskTo understand risk vs. UncertaintyTo understand types of riskTo unders...
The Concept of RiskRisk is a condition in which there is a possibility of anadverse deviation from a desired outcome that ...
Risk vs. UncertaintyUncertainty is often confused with the riskUncertainty can be perceived as opposite of certaintywhere ...
Loss and Chance of LossLoss refers to the Act or instance of losing the detrimentor a disadvantage resulting from losingLo...
PerilsA peril refers to the cause of loss or the contingency thatmay cause a loss              Chapter 1 Undertaking Risk ...
Hazards1. Physical Hazards – Property Conditions2. Intangible Hazards – Attitudes and Culture  a) Moral Hazard – Fraud  b)...
Types of RisksFinancial and Non-financial RisksIndividual and Group RisksPure and Speculative Risks› Pure risk situations ...
Classifying Pure Risks      Chapter 1 Undertaking Risk      Intorduction to Insurance and Risk Management
Personal Risks     These are the risks that directly affect the individual’s     capability to earn income. Personal risks...
Property RisksThese are the risks to persons in possession of the propertybeing damaged or lost              Chapter 1 Und...
Liability RisksThese are the risks arising out of the intentional orunintentional injury to the persons or damages to thei...
Methods of Handling PureRiskAvoidance  Avoid the risk to the circumstances which may lead to  lossesLoss Control  Loss Pre...
Transfer  To transfer the risk to another individual or organization  either byo Contractual Agreements – insurance, deriv...
SummaryRisk is a condition in which there is a possibility of anadverse deviation from a desired outcome that is expectedo...
“Like” us on Facebook:    p //                 /http://www.facebook.com/welearnindia “Follow” us on Twitter:http://twitter...
Upcoming SlideShare
Loading in...5
×

Understaning Risk

1,392

Published on

In this presentation we will help you to “Understand Risk”, with detailed description on the concept, types and classification of risks while also talking about effective ways to handle different Types of Risk in the banking sector.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html

Understaning Risk

  1. 1. Understanding RiskChapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  2. 2. Learning ObjectivesTo understand the concept of riskTo understand risk vs. UncertaintyTo understand types of riskTo understand classifying pure risksTo understand methods of handling pure risk Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  3. 3. The Concept of RiskRisk is a condition in which there is a possibility of anadverse deviation from a desired outcome that is expectedor hoped forAt its most general level, risk is used to describe anysituation where there is uncertainty about what outcomewill occur. Life is obviously risky Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  4. 4. Risk vs. UncertaintyUncertainty is often confused with the riskUncertainty can be perceived as opposite of certaintywhere you are assure of outcome or what will happenAccordingly, some weights or probabilities can beassigned into risky situations but uncertainty, thepsychological reaction to the absence of knowledge lacksthis privilege Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  5. 5. Loss and Chance of LossLoss refers to the Act or instance of losing the detrimentor a disadvantage resulting from losingLoss means being without something previouslypossessed Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  6. 6. PerilsA peril refers to the cause of loss or the contingency thatmay cause a loss Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  7. 7. Hazards1. Physical Hazards – Property Conditions2. Intangible Hazards – Attitudes and Culture a) Moral Hazard – Fraud b) Moral Hazard – Indifference c) Societal Hazard – Legal and Cultural Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  8. 8. Types of RisksFinancial and Non-financial RisksIndividual and Group RisksPure and Speculative Risks› Pure risk situations are those where there is a possibility of loss or no loss. There is no gain to the individual or the organization› Speculative risks are those where there is possibility of gain as well as lossStatic and Dynamic RisksQuantifiable and Non-quantifiable Risks Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  9. 9. Classifying Pure Risks Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  10. 10. Personal Risks These are the risks that directly affect the individual’s capability to earn income. Personal risks can be classified into the following typesa) Premature deathb) Old agec) Sickness or disabilityd) unemployment Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  11. 11. Property RisksThese are the risks to persons in possession of the propertybeing damaged or lost Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  12. 12. Liability RisksThese are the risks arising out of the intentional orunintentional injury to the persons or damages to theirproperties through negligence or carelessness Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  13. 13. Methods of Handling PureRiskAvoidance Avoid the risk to the circumstances which may lead to lossesLoss Control Loss Prevention – Reduce Loss Frequency Loss Reduction – Lower Loss SeverityRetention To retain in full or part of the risk Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  14. 14. Transfer To transfer the risk to another individual or organization either byo Contractual Agreements – insurance, derivatives, diversification strategies etc.o Corporatizing – converting the sole proprietor/partnership business into a company from an organization Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  15. 15. SummaryRisk is a condition in which there is a possibility of anadverse deviation from a desired outcome that is expectedor hoped forUncertainty refers to a state of mind characterized bydoubt, based on the lack of knowledge about what will orwhat will not happen in the futurePerils refer to the immediate causes of lossHazards are the conditions that increase the severity ofloss or the conditions affecting perilsPure risk may be Personal, Property or Liability Chapter 1 Undertaking Risk Intorduction to Insurance and Risk Management
  16. 16. “Like” us on Facebook:  p // /http://www.facebook.com/welearnindia “Follow” us on Twitter:http://twitter.com/WeLearnIndiahttp://twitter com/WeLearnIndiaWatch informative videos on Youtube: http://www.youtube.com/WelingkarDLP
  1. Gostou de algum slide específico?

    Recortar slides é uma maneira fácil de colecionar informações para acessar mais tarde.

×