• Like
Risk & Risk Management
Upcoming SlideShare
Loading in...5
×

Risk & Risk Management

  • 5,081 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
5,081
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
179
Comments
0
Likes
2

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. RISK AND RISK MANAGEMENT
    PRESENTED BY :
    DEVANSHI PANDA - 38
    SREEMOTI SENGUPTA - 73
    SONALIKA DAS - 113
    KALPITA MAHAPATRA- 119
    ANSULA MOHANTY - 180
  • 2. RISK
    • It is defined as an uncertainty consulting the concurrency of the loss.
    • 3. Categorized into two types:
    • 4. Objective Risk
    • 5. Subjective Risk
    • 6. Objective Risk:
    It is a variable of actual loss from excepted loss.
    • Subjective Risk:
    Based on persons mental conditions or state of mind.
  • 7. CHANCE OF LOSS
    Defined as probability that event can occur.
    Divided into two types:
    Objective Probability
    Subjective Probability
    Objective Probability:
    long run relative frequency of an event based on the assumption of an infinite no. of observation and there is no change in underline conditions .
    • Subjective Probability:
    It is individual personal estimate of the chance of loss.
  • 8. SOME RELATIVE TERMS OF RISK
    • PERIL:
    Defined as a cause of loss.
    • Hazard:
    It is a condition that creates or increase
    the chance of loss.
    • Physical:
    physical condition that increases the chance of loss.
    • Moral:
    It is dishonesty or character defect in an individual that increases the frequency or severity of loss.
    • Morale:
    It is the carelessness or indifferent to a loss .
    • Legal:
    It refers to the characteristics of the legal system or regulatory environment that increases the frequency or severity of the loss.
  • 13. CATEGORIES OF RISK
  • 14.
    • Fundamental Risk:
    It is defined in which effect the entire economy or large no. of persons or groups within the economy.
    • Particular Risk:
    It effects only the individuals not the the entire community.
    • Enterprise Risk:
    It is a relatively new term that encompasses all major risk faced by a business norm.
  • 15.
    • Speculative Risk:
    It is a situation in which either profit or loss is possible.
    • Pure Risk:
    It is defined as a situation in which there are only the possibility of loss and no loss.
    • There are different types of risk exist which are as follows:
    • 16. Personal Risk:
    It directly effects an individual.
    • Property Risk:
    Under this risk contains direct loss and indirect loss.
  • 17.
    • Direct loss:
    It is a financial loss that results from the physical damage ,destruction or theft of the property.
    • Indirect loss:
    It is the financial loss that results indirectly from the occurrence of the direct physical damage or theft.
    • Liability Risk:
    It is another type of pure risk that most person face under legal system, that one can be held legally liable for something that results in bodily injury or property damage.
  • 18. RISK MANAGEMENT
  • 19. Objectives of Risk Management:
    • Pre loss :
    • 20. The firm should prepare for potential losses in the most economical way.
    • 21. Reduction of anxiety
    • 22. Meet any legal obligation.
    • 23. Post loss:
    • 24. Survival of the firm
    • 25. Continue operating
    • 26. Stability of earning
    • 27. Continue growth of the firm
    • 28. Minimize effects that a loss will have on other persons and society.
  • Steps in Risk Management Process
  • 29. There are five methods of identifying loss exposures.
    Risk Analysis Questionnaires
    Physical Inspection
    Flowcharts
    Financial Statements
    Historical Loss data
    • Analyze the loss exposure: It involves estimation of frequency & severity of loss.
    Loss Frequency: Probable number of losses that may occur during some given time period.
  • 30. Loss Severity: It refers to the probable size of the losses that may occur.
    • Both maximum & maximum probable loss are estimated.
    • 31. Maximum possible loss is the worst loss that could happen to a firm during its lifetime.
    • 32. Maximum probable loss is the worst loss that is likely to happen.
    • 33. Select appropriate techniques for treating the loss exposures:
    It broadly consist of two techniques:
  • 34. Risk Control: It describes techniques for reducing the frequency or severity of loss.
    • Avoidance: It means a certain loss exposure is never acquired , or an existing loss exposure is abandoned.
    • 35. Loss Prevention: It refers to measures that reduce the frequency of a particular loss.
    • 36. Loss Reduction: It refers to measures that reduce the severity of a loss after it occurs.
    2.Risk Financing: It refers to the techniques that provide funding of losses after they occur.
  • 37.
    • Retention : It means that the firm retains part or all losses that can result from a given loss. It can be either active or passive.
    • 38. Noninsurance Transfers: Noninsurance transfers are methods other than insurance by which a pure risk and its potential financial consequences are transferred to another party.
    • 39. Commercial Insurance: Commercial insurance is also used in a risk management program. Insurance is appropriate for loss exposures that have a low probability of loss but for which the severity of loss is high.
    • Implement & Monitor the risk management process.
    • 40. Risk Management Policy Statement: This statement outlines the risk management objectives of the firm.
    • 41. Risk Management Mannual : It consists of details of risk management program & helps in training new employees .
    • 42. Co operation with other departments like accounting , finance , marketing , production and human resources.