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Related Flashcards
Cards In This Set
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Categories of Risk Used in ERM
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1. Hazard risk2. Operational risk3. Financial risk4. Strategic Risk
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Financial Consequences of Risk
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1. Expected Cost of losses2. Cost of Risk Management3. Cost of Residual Uncertainty
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Key Elements in Risk
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1. Uncertainty2. Possibility
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Major Categories of Hazards
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1. Moral Hazard2. Attitudinal Hazard/Moral Hazard3. Physical hazard4. Legal Hazard
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Major ways to Classify Risk
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1. Pure risk vs. Speculative Risk2. Subjectiver risk vs. Objective risk3. Diversifiable risk vs. Nondiversifiable risk
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Plan for meeting the continuity of operations objective
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1. Identify activities that cannot be interrupted2. Identify accidents which can interupt those activities3. Determine respirces needed to conunter loss effects4. Provide those resources
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Post Loss Risk Management Goals
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1. Survival2. Continuity of Operations3. Profibility4. Earnings Stability5. Social Responisbilty (Humanitarian Conduct)6. Growth
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Pre Loss Risk Management Goals
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1. Economy of operations2. Tolerable Uncertainity3. Legality4. Social Responsibility (Humanitarian Conduct)
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Reasons Subjective Risk differs from Objective Risk
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1. Familiarity2. Control3. Frequency and Severity
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Risk Management Process
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1. Identify and Analyze Exposures2. Evaluate Alternative RM Exposure Treatment Techniques3. Select the best combination of RM techniques4. Implement decision5. Monitor the program
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Speculative Risk Includes
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1. Price Risk2. Credit Risk3. Inflation Risk4. Financial Risk5. Liquidity Risk6. Interest Rate Risk7. Market Risk
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Significant Differences between RM and Traditional RM
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1. Strategic application2. Risk considered3. Performance measurement
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Types of Loss Exposures
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1. Property2. Liability3. Personal4. Personnel5. Net Income
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