Risk management

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Related to Risk reduction: Risk Avoidance

Risk management

The process of identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures.

Risk Management

The process of identifying risks to an investment and, if possible, mitigating them. The first stage of risk management is determining the types and magnitudes of risk. For example, a risk manager might look at a bond and identify the possibility of default as a risk and evaluate the likelihood of that scenario. The second stage is taking steps to remedy risk, insofar as it is possible. In the above example, the risk manager might recommend buying other bonds to offset the risk of default on any single bond. Sometimes risk cannot be mitigated; in that case, risk managers evaluate how central the investment is to one's investment goals and risk tolerance. Generally speaking, investors seek the highest possible return at the lowest possible risk. Risk management helps them achieve this goal by showing how their investments may be affected and finding ways to alleviate the situation.

Risk management.

Risk management is a set of strategies for analyzing potential risks and instituting policies and procedures to deal with them. The work of assessing the possibilities, setting priorities, and finding cost-effective solutions is also described as business continuity planning.

In a business environment, some risks, such as economic pressures or technology meltdowns, are universal while others are unique to a particular venture or physical location.

Large companies may use a combination of strategies to manage risk, including buying insurance, creating redundant systems, diversifying physical locations or core businesses, and establishing other hedges.

For an individual investor, risk can be managed in several ways: insuring at least a portion of your portfolio, allocating your assets across classes, diversifying your holdings, and hedging with derivative products.

risk management

A systematic approach to identifying insurable and noninsurable risks, evaluating the risk of loss versus the cost of insurance, and minimizing the possibility of loss through well-planned and regularly followed systems and procedures. Especially in construction, which typically has the very highest premiums for workers' compensation insurance, well-planned and well-executed risk management programs can result in significant savings on premiums.

References in periodicals archive ?
What elements do lawmakers need to be in place in order to align legislative work for inclusive Disaster Risk Reduction? What financing solutions exist?
The Regional Workshop on Sendai Framework for Disaster Risk Reduction was adopted for the period 2015 to 2030 at the Third UN World Conference on Disaster Risk Reduction held in Sendai, Japan, in 2015.
Anil Sinha, Co-Chair, ARISE FICCI, said disaster risk reduction does not get much funding as opposed to climate change initiatives, as benefits of DRR are not visible in the short-term.
Japan learnt from these experiences, making different innovations to reduce the impact of disasters, and appeared as a high-technology country in disaster risk reduction.
The sides discussed a concept of the second phase of the UNDP's project and official participation of Kyrgyzstan in the World Conference on Disaster Risk Reduction which will be held in Sendai (Japan) on March 14-18, 2015.
"Reducing Coastal Risk on the East and Gulf Coasts" recommends that benefit-cost analysis, constrained by acceptable risk criteria and other important environmental and social factors, be used as a framework for evaluating national investments in coastal risk reduction. The recommendations of this report will assist engineers, planners and policy makers at national, regional, state, and local levels to move from a nation that is primarily reactive to coastal disasters to one that invests wisely in coastal risk reduction and builds resilience among coastal communities.
The DFA said the conference is being held at a "crucial" time when the decade-old Hyogo Framework of Action (HFA) adopted by the world community as the global paradigm on disaster risk reduction and management (DRRM) is about to end in 2015.
Disaster Risk Reduction (DRR) publications will also be available at the booth.
The UN and other global institutions anticipate more flooding and other climate catastrophes if investment in risk reduction does not accompany expanding urban communities
The committee's inquiry found the Welsh Government's stroke risk reduction action plan is not being managed as effectively as it could be and needs to be revisited to make maximum use of effective risk reduction services.
A new risk model suggests that a risk reduction of 1.6% could prevent 16,000 cases of breast cancer in a population of 1 million women.
An online version of NIH's continuing education program for nurses about SIDS risk reduction is now available.