If you were to “Google” the term ‘risk management,’ 83,900,000 entries would appear. By combining ‘risk management’ with ‘insurance,’ a further 49,600,000 options would be available to an interested reader. Clearly the two concepts are intertwined, but conversely they are often seen as the same thing.

This article explores the meaning of ‘risk management’ as an integrated, dynamic process within an organization, of which insurance represents one component of the solution.

WHAT IS RISK MANAGEMENT?

Risk management is more than simply risk avoidance and transfer. An organization’s risk management program should be a continuous and developing process that aligns with its overall strategy and enables the implementation of that strategy. A properly designed program will support corporate objectives and help to minimize volatility in achieving them. To be effective and sustainable, risk management must be integrated into the culture of an organization. With risk management becoming increasingly topical in both regulatory and governance circles, it behooves any good manager to understand and use the principles for managing risk.

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