Identify loss exposures
Measure and analyze the loss exposure
Select the appropriate combination of techniques for treating the loss exposures.
Implement and monitor the risk management program
Risk management policy statement
- outlines the risk management objectives of the firm
- treatment of loss exposures
- educates top-level executives in regards to the risk management process
- establishes the importance, role, and authority of the risk managers
- provides standards for judging the risk manager’s performance
Risk management manual
- details of the risk management program of the firm
- to be used for training managers, supervisors, and new employees.
- responsibilities, objectives, techniques
- includes a list of insurance policies, agent and broker contact information,
who to contact when a loss occurs, emergency contact numbers, and other
To identify new risks as soon as possible
To look for the risks that might be reduced and eliminated
To find out the risks that have disappeared and no longer need coverage
To have the opportunity to rectify mistakes when the mistakes are discovered.
To determine whether the objectives are being attained or if corrective actions are
Risk management costs, safety programs, and loss-prevention programs must be
Lost records must be examined to detect any changes in frequency and severity.
Retention and transfer decisions must be reviewed.
Whether the firm’s overall risk management policies are being carried out
Whether the risk manager is receiving cooperation from other department.