RSK3701 Summary 2021

Study Unit 01 Define and explain - Risk: Risk is the uncertainty of loss. Unfavourable deviation from the expected. Define Risk Management: A means of removing some or all of the uncertainty Differentiate between : Pure / Event Risk Speculative Risk There is either a Loss or No Loss Taken out in the hope of some gain. Particular risk: Affects only you of your family, not society as a whole. Break in. Fundamental risk: Affects society as a whole. War. Earthquake. Risk Management Control – 2 core activities: - Risk Financing: Retention Transfer - Risk Control: Avoidance / Elimination Reduction / Minimisation Risk sharing: Special case – risk is transferred from the individual to the group **Risk cannot be transferred – only the financial consequences of the risk are transferred to the insurer. How does insurance fit into risk management: Risk control – Financial – Transfer of risk Steps in the risk management process: 3 Phases in the risk management process: Risk identification by means of: - Physical inspection - Organisational charts - Flow charts - Check lists 1. Risk Identification 2. Risk Evaluation 3. Risk Control Financial Physical Severity Frequency Retention Transfer Elimination Minimisation PreLoss PostLoss Whole Risk Some Risk: Catastrophe Self/ Captive Insurance Noninsurance Skills required to identify risks: How to evaluate risk quantitatively and qualitatively: - Quantitative Measures: Usin