Risk Management

Traditionally the extent of some organizations risk management has been limited to arranging insurance which was rarely evaluated and often provided by way of limited policy wordings and coverage. This often resulted in the extent to which risk was transferred to these insurance policies being severely over estimated, thereby undermining the principal objective of arranging these insurances.

Risk management has evolved into a fundamental management practice to which various professional disciplines contribute to identify and then manage the risk that could severely impact or prejudice an organization, of which insurance is only one.

What is a risk?

Risk in insurance terms, insurance risk, is the possibility of a loss or other adverse event that has the potential to have a financial impact on an organization, and from which an insurance claim may occur. However there are many risks unrelated to insurance risk to which an organization is exposed such as contractual, operational, employment, financial and reputation risk which is why risk management has evolved into such a fundamental management practice to which many professional disciplines, in addition to insurance, must contribute.

What is risk management Insurance?

Risk management ensures that an organization identifies and understands the risks to which it is exposed and guarantees that the organization creates and implements an effective plan to prevent or reduce the impact of risk on their business.

Such a plan includes strategies and techniques for recognising and confronting these threats. A good plan doesn't have to be expensive or time consuming; it may be as uncomplicated as answering these questions:

• What can go wrong?
• What will we do, both to prevent the risk from occurring and in response to the risk should it occur?
• How do we protect ourselves from the financial cost should a risk occur?

Benefits of risk management.

The effective management of risk provides a clear and structured approach to identifying an organizations exposure to risk. Having a clear understanding of all risks allows an organization measure and prioritise risk and then take appropriate actions to reduce exposure. Other benefits for an organization, including:

• Saving resources: Time, assets, income, property and people are all valuable resources that can be affected by risk
• Protecting the reputation and public image of the organization
• Preventing or reducing legal liability and increasing the stability of operations
• Protecting people from harm.
• Protecting the environment
• Enhancing the ability to prepare for various circumstances
• Reducing liabilities
• Assisting in clearly defining insurance requirements

An effective risk management practice does not eliminate risk. However, in addition to being a fundamental management practice, having an effective and operational attitude to risk demonstrates to an insurer that your organization understands the risks to which it is exposed and is committed to risk reduction or prevention. It makes your organization a more attractive insurance proposition which is often reflected in the terms, conditions and costs of an insurance programme.

Our insurance risk managers

Insurance is a valuable risk-financing tool for managing insurance risk. Few organizations have the reserves or funds necessary to take on the all risk themselves and absorb the total costs following a loss. Purchasing insurance following the identification and evaluation of insurance risk, however, is not risk management. A thorough and thoughtful risk strategy plan is the commitment to mitigate an organizations exposure to Risk and also address many risks that are not insurable.

Do I need risk management Insurance?

As fundamental management practice, an organization should have a strategy for identifying and managing the risks to which they are exposed because:

• Organizations are increasing being held accountable for their actions and liable for the actions of their employees
• People are now more likely to initiate legal action for compensation and/or financial recovery. Taking steps to reduce injuries of protecting clients from financial loss as a consequent of poor professional advice could help in defending against a claim
• Courts are often sympathetic to injured claimants giving them the benefit of the doubt in actions against the financially stronger corporate entity
• Organizations and individuals are held to increasing high standards of care with greater accountability and regulatory and legal obligation
• People are more aware of the level of service to expect, and the recourse they can take if they have been wronged
• Organizations are perceived as having a lot of assets and/or high insurance policy limits

How will Robertson Low contribute to Risk Management?

Robertson Low will participate and contribute to an organizations risk management function by;

• Assisting with the development of a risk management function within the organization
• Attend regular management and claims review meetings
• Contribute to the identification of insurance risk within an organization
• Undertake a thorough evaluation of an organizations insurance programme to ensure adequacy of structure, insurer and contract wordings
• Assist with identification of emerging trends within insurance risk to which the organization is exposed and the development of suitable strategies designed to mitigate or eliminate an organizations exposure to emerging insurance risk or trends within existing insurance risk
• Contribute to the general operation of an organizations risk management function by appropriate introduction of additional professional disciplines