RISK MANAGEMENT PROCESS

LEARNING OBJECTIVES

This chapter emphasis on :

Characteristic of riskConcepts related to riskThe measurement of riskThe management of riskThe characteristic of insurable risks

CONTROLLING THE RISK MANAGEMENT PROGRAMME

IMPLEMENTING THE RISK MANAGEMENT PROGRAMME

SELECTING RISK HANDLING TECHNIQUES

EVALUATING POTENTIAL LOSSES

IDENTIFYING LOSS EXPOSURES

Identify all the loss exposures or pure risk includes:

Physical damages Loss of business interruptionLaw enforcementOrganizational loss due to fraud, white

collar crime by the staffsDeath/loss of important employees

1. IDENTIFYING LOSS EXPOSURES

Information of loss exposure can be gathered through:

a) Questionnairesb) Financial

statementsc) Flow chartd) Self inspection

on facilities

Loss frequency and severity Level the exposures according to priorityExposures that has the highest potential

of loss will be given priority

2. EVALUATING POTENTIAL LOSSES

Select the techniques of handling risk based on financial & non-financial criteria

Non financial criteria such as human needs and legal requirement

3. SELECTING RISK HANDLING TECHNIQUES

Risk type

Loss frequency Loss severity Suitable techniques

1 Low Low Retention

Matrix of Risk Management Table

Risk type

Loss frequency Loss severity Suitable techniques

1 Low Low Retention

2 High Low Retention & loss control

Matrix of Risk Management Table

Risk type

Loss frequency Loss severity Suitable techniques

1 Low Low Retention

2 High Low Retention & loss control

3 Low High Insurance

Matrix of Risk Management Table

Risk type

Loss frequency Loss severity Suitable techniques

1 Low Low Retention

2 High Low Retention & loss control

3 Low High Insurance

4 High High Avoidance

Matrix of Risk Management Table

The organization should implement the well planned of risk management from time to time

Resulting of good risk management :1. Prevent/reduce of workplace accident2. Decrease the loss frequency3. Reduce the cost of burden loss severity4. Increase the organizational value added (zero defect)

4. IMPLEMENTING THE RISK MANAGEMENT PROGRAMME

Risk management program should be monitored Objective program can be achievedIf necessary, improvement of the program should

be taken

5. CONTROLLING THE RISK MANAGEMENT PROGRAMME

GROUP ACTIVITY 1:

After watched the Risk Management video, please:Discuss within the group the risk management process that you have watched.Use the process of risk management provided as your guideline In 15 minutes time, please come up with your discussion. Note : You are free to Present your work using slide show, card or writing in whiteboard (or any other material that you feel ease to use)

video.mp4