Risk Assessment, Risk Finance & Risk Transfer
Risk Assessment
Includes identification of a many risk facing the enterprise as reasonable and then calculating likely effects of those risks and/or the variation in those effects. This is not simply a checklist-and-list of insurance policies exercise because there is so much more to risk than insurance! We use some or all of the following as appropriate:
- Observation and inspection
- Research and business intelligence
- Consideration the enterprises's own risk intelligence
- Operations research, probability, statistics, and actuarial techniques
- Forensic analysi
- Financial statement analysis
Risk Analysis
Takes the output from the risk assessment and examines the variability and impact of the various risks on the enterprise or project. It identifies weaknesses and errors in a plan and guides management on ways to improve its situation and likelihood of success.
Risk Treatment (including Risk Finance and Risk Transfer
Refers to what you do with a particular risk now that you have a quality assessment and analysis.k Risk treatments generally fall into these categories:
- Avoid the risk
- Reduce/control the risk
- Retain the risk (i.e. self-insurance)
- Transfer the residual risk - generally through insurance or a capital market mechanism.