RISK MANAGEMENTPresented by:Shivani SharmaM.Com semIII3106

Meaning of RiskRisk may be defined as the phenomenon which is closely associated with uncertain event or peril on which the object is exposed and may cause loss or injury to something of value.

According to Williams and Heins,

“Risk is the variation in the possible outcome that exists in

nature in a given situation.”

TYPES OF RISK

Non economic

risk

Economic

risk

Insurable risk

Features of INSURABLE RISK

Insurable Interest Pure and major riskQuantifiable riskMonetary RiskCommon Risk

Risk must be casualLegal ObjectsReal riskInsurance Cost

CAUSES OF

RISK

Natural Causes

Unnatural Causes

Other Causes

Natural CausesSeasonal Changes

Natural Calamities

Geographical Changes

Unnatural CausesHuman Forces

Government Policies

Economic Causes

Other CausesInefficient Management

Adulteration in food articles

Low quality products

TYPES OF RISK

Financial Risk and Non-Financial Risk

Pure and Speculative Risk

Dynamic Risk and Static Risk

Fundamental Risk and Particular Risk

PROCESS OF RISK

MANAGEMENT

Identification of source of risk

Measurement of impact of risk

Treatment of risk

Selection of suitable methods of risk handling

Implementation if selected method

Feedback

RISK

HANDLING

TECHNIQUES

Avoiding riskRisk ReductionAssumption of riskInsurance

Transfer of riska)Hedgingb)Sub- Contractingc) Surety Bondd)Limited Company