Kgare Insurance Brokers has ample capabilities in advising and supporting its clients in risk identification, evaluation, monitoring and management. We will assist to correctly set-up a risk management architecture using a combination approach of various models to come produce a customised Enterprise Risk Management solution for each client.
Kgare works with a number of local and international risk management partners thus keeping our clients abreast of contemporary local and global trends.
Definition
Risk management is defined as identification, assessment and economic control of those risks that endanger the assets and earning capacity of a business.
Basic Activities
Risk Management is a process through which the companies control their level of risk and the key elements of an effective risk management programme are: policy, procedures and standards Policy describes the objectives of the Risk Management programme. Procedures determine how the policy will be implemented. Standards provide guidance on particular issues. Basic Risk Management Activities are:
- Risk Identification
- Assessment Risk
- Control Risk
A Risk Can Be tolerated if:
- The likelihood of its occurrence is sufficiently remote
- The consequences are not severe.
Risks Can Be Eliminated Or Reduced By:
- Changes in the processes.
- Transferring all or part of the risk.
Each Companies Risk Management System Is Different Because
- Their risks are different.
- Operations and organizations are unique.
- Corporate culture is unique
Importance Of Risk Management
- Legislation is now more extensive
- Legislation is now more stringent
- Risk Assessment is growing more common in many areas of legislation.
Insurance Is More Difficult & More Expensive to Obtain
- Is no longer the cheap option.
- Open ended cover is no longer widely available.
- Insurance companies like their clients to actively manage their risks.
- It does not compensate the full loss.
- Pay outs may be delayed.
Customer Attitudes
- Corporate customers want to pass on their legal responsibilities to their suppliers.
- Customers are more litigious.
- Shareholders are more aware of the risks.
Management Attitudes
- Management has learned from other firms disasters.
- Companies are becoming professional.
- Becoming global.
Business Risks
The first and more traditional type is non-entrepreneurial risk, typically fire, pollution, fraud risks. Companies used to protect against these by buying insurance, which is not a complete protection and is also not the only one the second type of risk is entrepreneurial risk. This occurs when a company builds a new plant, launches a new product or buys a company. If the company gets its forecast wrong, it loses money. There are ways of reducing these risks by way of adopting a proper risk management system.
