final banking and insurance

8/3/2019 Final Banking and Insurance

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Risk Management In Insurance

Group Members:

Abhishek Rane (39)

Umair Khan (52)


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Good management practice Process steps that enable improvement

in decision making A logical and systematic approach Identifying opportunities Avoiding or minimizing losses

What is Risk Management?


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Risk Management is the name givento a logical and systematic methodof identifying, analysing, treating

and monitoring the risks involved in

any activity or process.



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Risk Management is amethodology that helps managersmake best use of their available

resources



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Risk Managementpractices are widely used

in public and the privatesectors, covering a widerange of activities oroperations.

These include:

Who uses Risk Management?

Finance andInvestment

Insurance Health Care

Public

Institutions Governments


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Effective Risk Management is a recognised and valued skill.

Educational institutions have formalstudy courses and award degrees in RiskManagement.

The Risk Management process is wellestablished. (International RM processstandards.)

Who uses Risk Management?


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The Risk Management

process steps are ageneric guide forany organisation,regardless of the

type of business,activity or function.

How is Risk Management used?

There are 7 steps

in the RMprocess


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The basic process steps are:

Establish the context

Identify the risks

Analyse the risks

Evaluate the risks

Treat the risks


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Risk is dynamic and subject to constantchange, so the process includescontinuing:

Communication & consultation

Monitoring and review

and


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The Risk Management process:

The strategic and organisational context inwhich risk management will take place.

For example, the nature of your business,the risks inherent in your business and

your priorities.

Establish the context


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Defining types of risk, for instance,Strategic risks to the goals and objectivesof the organisation.

Identifying the stakeholders, (i.e.,who isinvolved or affected).

Past events, future developments.

Identify the risks


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Analyse the risks

How likely is the risk event to happen?

(Probability and frequency?)What would be the impact, cost orconsequences of that event occurring? (Economic, political, social?)


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Evaluate the risks

Rank the risks according to management

priorities, by risk category and rated bylikelihood and possible cost orconsequence.

Determine inherent levels of risk.


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Treat the risks

Develop and implement a plan with specificcounter-measures to address the identifiedrisks.

Consider: Priorities (Strategic and operational) Resources (human, financial and technical) Risk acceptance, (i.e., low risks)


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Risk Management policies and decisionsmust be regularly reviewed.

Monitor and review

In identifying, prioritising and treating risks,organisations make assumptions and decisionsbased on situations that are subject to change,(e.g., the business environment, tradingpatterns, or government policies).


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Risk Managers must monitor activities andprocesses to determine the accuracy ofplanning assumptions and the effectivenessof the measures taken to treat the risk.

Methods can include data evaluation, audit,

compliance measurement.

Monitor and review


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Insurance

All Risks are not InsurableEssentials of Insurance

Insurable InterestUtmost good faith

Procedure for InsuranceIdentification of RisksQuantify the Insurable valueEvaluate the choices

ProposalPayment of premiumPolicy Documentation

Claims

Administration System


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Insurable Risks

PROPERTY RISKSDamage to Physical Assets

Acts of GodAccidentsBreak down

FINANCIAL RISKSMonetary Loss from Theft and Burglary

Business interruptionBad credit

PEOPLE RISKSLoss to Employees

ILL Health and accidentDeathOverseas travel

LIABILITIESRISKS

Loss from Operations Product liabilitiesPublic liabilityDirectors & OfficersliabilitiesErrors & Omissionsliabilities


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Focus Areas for InsuranceManagement

Identification of Internal & External Pure Risks Existing Risk Control Measures Review Risk inspection

Risk Audit Scrutiny of Existing Insurance Covers

Coverage Rates & Deductibles (Compulsory self insurance)

Defining Standard SOP for Claims Control Guidelines on documentation

final banking and insurance

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