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Advantages of Having a Risk Management Plan

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Cost Of Risk Graph


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Graph showing the advantages of having a risk management plan in effect

Published in: Economy & Finance, Business
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Cost Of Risk Graph

  1. 1. Advantages of Having a Risk Management Plan No Plan High Frequency High Severity X High Expense High Exposure No Controls $ Cost of Risk Reactive Management Driving down cost of risk using a plan With a Plan Low Frequency Low Severity Low Expense Low Exposure High Level of Controls Proactive Management Time 1) Do Nothing – Take your chances as to where you end up on the higher band 2) Take Control – Proactively position yourself at the bottom of the lower band