including risk management meaning, types , process and RMIS

1. BY MAMTA

2. Risk
Risk includes the possibility of losing some or
all of the original investment.

3. Type Of Risk
 Market Risk: The risk that the value of your
investment will decline as a result of
market conditions.
 Interest rate risk :The risk caused by
changes in the general level of interest
rates in the marketplace.
 Inflation or Purchasing Power Risk: The risk
that the return on your investment will fail
to outpace inflation.

4.  Business Risk: This is the risk that issuers of
an investment may run into financial
difficulties and not be able to live up to
market expectations
 Credit Risk: For bonds, this is the risk that
the issuer may default on periodic interest
payments and/or the repayment of
principal.
 Exchange Rate Risk: This is the risk that
returns will be adversely affected by
changes in the exchange rate.

5.  Country or Political Risk: This is the risk that
arises in connection with uncertainty
about a country’s political environment
and the stability of its economy.

6. RISK MANAGEMENT
The process of identification, analysis and
either acceptance or mitigation of
uncertainty in investment decision-making.

7. Characteristics
Scientific approach
Consider insurable and uninsurable
risk
Main emphasis on reducing cost of
handling risk by using appropriate
method

8. Cost Of Risk
Components of the cost of risk:
 Cost of expected losses
 Cost of control of loss
 Cost of loss financing
 Cost of loss internal risk reduction method
 Cost of residual uncertainty

9. Risk Management Information
System (RMIS)
 RMIS is designed to help in functions of risk
management
 Gathers information from various systems
into one database
 Data can be analysed from various
angles

10. Uses of RMIS
 For reporting
 For claim adjustment process review
 For examination about reasons of
accidents

11. Process Of Risk Management
Step 1 – Establish the context
Step 2 – Identify the risks
Step 3 – Analyse the risks (& evaluate)
Step 4 – Treat the risks
Step 5 – Monitor and review

13. Methods Of Risk Management
 Loss control- those actions which reduce
expected cost of losses by reducing the
frequency of losses
 Loss financing- methods used to obtain
funds to pay for offset losses that occur
 Internal risk reduction
 diversification
 investment in information

14. THANK YOU