Risk Management
Samenvatting
,Inhoud
1. Introduction to risk management.............................................................3
1.1. Positive and Negative risk.....................................................................3
1.2. Dynamic and Static risk........................................................................4
1.3. Risk categories or risk universe............................................................4
2. What is risk management........................................................................7
2.1. Risk management in practice: key elements........................................7
2.2. Risk and reward: trade-off.....................................................................7
3. How to perform a risk analysis...............................................................12
3.1. How to perform a risk analysis in 6 steps...........................................12
3.2. Focus areas in risk analysis: 4P’s........................................................12
3.3. The steps............................................................................................13
3. Corporate insurances ( for SME’s)..........................................................16
3.1. What is an insurance...........................................................................16
3.2. Key elements of insurance contracts..................................................16
3.3. Insurance industry in Belgium.............................................................16
3.4. Reinsurance: insurance for insurer......................................................18
3.5. Considerations of insurer and insured.................................................18
3.6. Liability insurances (BA – Burgerlijke Aansprakelijkheid)....................20
3.7. Other corporate insurance..................................................................23
Exercises:...................................................................................................24
, 1. Introduction to risk management
Risk management:
- Possibility of something that could go wrong
- Negative impact on the company
- Effect of uncertainty on objects
- Exposure to the possibility of loss, injury or other adverse or
unwelcome circumstance, a chance or situation involving such a
possibility
Key components of risk:
- Probability/likelihood of future uncertainty
- Uncertain (future) event itself
- Impact / effect / consequences (on objectives and results)
Other definitions:
- International Organization for Standardization (ISO)
o “Effect of uncertainty on objectives; an effect is a deviation
from the expected – positive or negative.”
- Oxford English Dictionary (OED):
o “Exposure to the possibility of loss, injury, or other adverse or
unwelcome circumstance; a chance or situation involving such
a possibility.”
- Cambridge Advanced Learner’s Dictionary:
o “The possibility of something bad happening.”
1.1. Positive and Negative risk
NEGATIVE POSITIVE
Uncertainty Hazard/threat Opportunity
Uncertain event which an uncertain event uncertain event with a
may (or may not) with a negative positive outcome
happen in the future outcome or threat to
the organization
its likelihood or managing risk in this risk can be seen as a
probability can only be context means using source of opportunity
estimated management to business; e.g. asset
techniques to reduce or investment will
the probability or increase in value
impact of the negative beyond expectations
event
may prevent or delay also so-called so-called ‘upside risk’
the achievement of an ‘downside risk’ in
Samenvatting
,Inhoud
1. Introduction to risk management.............................................................3
1.1. Positive and Negative risk.....................................................................3
1.2. Dynamic and Static risk........................................................................4
1.3. Risk categories or risk universe............................................................4
2. What is risk management........................................................................7
2.1. Risk management in practice: key elements........................................7
2.2. Risk and reward: trade-off.....................................................................7
3. How to perform a risk analysis...............................................................12
3.1. How to perform a risk analysis in 6 steps...........................................12
3.2. Focus areas in risk analysis: 4P’s........................................................12
3.3. The steps............................................................................................13
3. Corporate insurances ( for SME’s)..........................................................16
3.1. What is an insurance...........................................................................16
3.2. Key elements of insurance contracts..................................................16
3.3. Insurance industry in Belgium.............................................................16
3.4. Reinsurance: insurance for insurer......................................................18
3.5. Considerations of insurer and insured.................................................18
3.6. Liability insurances (BA – Burgerlijke Aansprakelijkheid)....................20
3.7. Other corporate insurance..................................................................23
Exercises:...................................................................................................24
, 1. Introduction to risk management
Risk management:
- Possibility of something that could go wrong
- Negative impact on the company
- Effect of uncertainty on objects
- Exposure to the possibility of loss, injury or other adverse or
unwelcome circumstance, a chance or situation involving such a
possibility
Key components of risk:
- Probability/likelihood of future uncertainty
- Uncertain (future) event itself
- Impact / effect / consequences (on objectives and results)
Other definitions:
- International Organization for Standardization (ISO)
o “Effect of uncertainty on objectives; an effect is a deviation
from the expected – positive or negative.”
- Oxford English Dictionary (OED):
o “Exposure to the possibility of loss, injury, or other adverse or
unwelcome circumstance; a chance or situation involving such
a possibility.”
- Cambridge Advanced Learner’s Dictionary:
o “The possibility of something bad happening.”
1.1. Positive and Negative risk
NEGATIVE POSITIVE
Uncertainty Hazard/threat Opportunity
Uncertain event which an uncertain event uncertain event with a
may (or may not) with a negative positive outcome
happen in the future outcome or threat to
the organization
its likelihood or managing risk in this risk can be seen as a
probability can only be context means using source of opportunity
estimated management to business; e.g. asset
techniques to reduce or investment will
the probability or increase in value
impact of the negative beyond expectations
event
may prevent or delay also so-called so-called ‘upside risk’
the achievement of an ‘downside risk’ in
