Articles on Risk Management

Risk Management - Introduction

Risk Management is the process of minimizing the risks in an organization. It starts with the identification and evaluation of risk followed by optimal use of resources to monitor and minimize the same.

Benefits of Risk Management

This article explains the various benefits of risk management. The various benefits have been explained in detail in this article.

Principles of Risk Management

The Project management body of knowledge (PMBOK) has laid down 12 principles. This article discusses about the various principles of Risk Management.

Risk Management Process

As per ISO 31000 Risk Management Process consists of the mailny 3 steps - Establishing the Context, Identification and Assessment.

Risk Identification and Assessment

Once the risk has been identified the HR manager approaches the line managers and their staff and questions them to assess and prioritize the risk.

Aspects of Risk Management

The process of risk management not only involves controlling the threats or reducing their negative effects. It is a much deeper concept that also involves risk avoiding as well as risk taking.

Steps in Risk Management Process

This article explains the risk management process. The various steps in the process as well as the tasks that need to be performed in each of the steps have been mentioned in detail in this article.

Approaches to Risk Management

This article explains the various approaches to risk management. The positive and negative impacts of following this approach have also been mentioned in this article.

Risk Management Policy

This article explains the concept of risk management policy. It also explains what the contents of this policy document should be and how it will guide the organizations actions in the future.

Commonly Used Measures of Risk

This article explains the various types of measures of risk. It explains how these measures of risk are different from each other and have evolved through the years

Risk Management Plan

A good risk management plan carries number of tools and strategies to mitigate risk. The strategy may be to avoid risk or transfer a component of it another project so that the impact is reduced.

Evaluation of Risk Management Plan

The article discusses about various steps that can help the organizations in analyzing and evaluating a Risk Management Plan.

Risk Treatment

A risk treatment is mainly a part of an effective risk management plan. It details with the strategies on how to deal with the various types of risks.

Role of HRD in Risk Management

The importance of Human Resource Management can not be neglected when companies are operating in such a volatile and unstable environment. The HRD plays a vital role in risk management.

Enterprise Risk Management

Enterprise Risk Management includes all the tools and processes employed by an organization to manage and control risks and grab more opportunities in the market place.

Implementing ERM

Once the organization decides to go for Enterprise Risk Management, there are lots of considerations made for its successful implementation. Lets discuss these considerations in detail.

Risk Management and Stock Market

In stock market there is a very strong relationship between risk and return. Generally, greater the risk, greater the is the return. Risk is therefore central to stock markets.

Outsourcing Risk Management Program

Outsourcing or contracting out non-core services may deliver good results and substantial benefits to the organization. Nowadays, many company employ external sources and utilize their specialized services.

Risk Management as a Profession

Risk management has evolved from being just a discipline to a full-fledged profession. There are lot of Career opportunities in Risk Management.

Anticipating and Mitigating Organizational Risks in the Digital Age

This article examines the threats to organizations in the Digital Age. Using examples from the real world, we argue that organizations and business leaders have more to worry now than before and hence, they must anticipate the risks to the best possible extent and mitigate them as well. The discussion also includes threats and risks from Data Collection, Data Security, Human Resource Risks, and the very real aspect of Machines Taking over and making humans obsolete.

Challenges Facing the Australian Economy

This article describes the challenges facing the Australian economy. The major challenges have been listed, and their impact on the Australian economy has been explained in detail.

The Economic Costs of MeToo

This article explains the economic costs of MeToo movement. It lists the reasons why companies have reduced the hiring of women after the #MeToo scandal. It also explains why these economic costs are not only for the perpetrators but also the victims.

Automated Claims Processing

This article lists the benefits of automating the claims settlement process. It also explains the best practices followed by different companies in detail.

Challenges in Global Insurance And International Claims

This article explains how global insurance works. It then lists all the major hindrances which are faced while settling international claims.

Conflicts of Interest in the Insurance Business

This article explains the concept of conflicts of interest in the insurance industry. It also explains how such conflicts of interest affect the various parties involved. Lastly, it emphasizes the need for education of customers in order to neutralize the problem.

The Cost Structure in the Insurance Industry

This article explains the cost structure within the insurance industry. The major drivers of costs are listed down in the article. Probable future changes to the cost structure have also been listed and explained.

How Drones Will Impact the Insurance Industry?

This article explains how drones are likely to impact the insurance industry. It lists down some of the most common uses of drones in the insurance sector. It also explains the possible monetary damages which are likely to occur when drones malfunction.

How Is Health Insurance Funded?

This article explains the different ways in which healthcare is funded throughout the world. It explains the pros and cons of each system. Lastly, it also explains that no system is inherently right or wrong.

How Self Driving Cars Impact Insurance?

This article explains how self-driving cars will impact the motor insurance industry. The biggest possible repercussions of this have been listed and described in detail.

How Stock Market Volatility Affects Insurance Companies?

This article explains how insurance companies make money. It explains the importance of investment income for the solvency and growth of insurance companies. It also explains how market volatility adversely affects the insurance companies.

Insurance Agents vs. Insurance Brokers

This article explains the difference between an insurance broker and an insurance agent. It explains whom they represent, how they make money and who is accountable for the actions that are undertaken by them.

The ABC’s of Insurance Fraud in India

This article explains the insurance fraud situation in India. It explains the common modus operandi used to conduct insurance fraud. It also explains the possible ways to reduce the losses that can be attributed to fraud.

Technological Advances in the Insurance Industry

This article explains the rapid advancement of technologies within the insurance sector. It lists some of the major technological advancements that are making their way into the insurance sector and also provides a detailed explanation.

The Basics of Unemployment Insurance

This article explains how unemployment insurance works. Common misconceptions related to unemployment insurance have been cleared in this article. Many salient features of the scheme have been explained in detail.

The Pros and Cons of Unemployment Assistance and Why it Matters in the Present Times

This article explains what Unemployment Assistance is and debates the Pros and Cons of the same. We argue that the Free Market West has a social and moral obligation to help the vulnerable and at the same time, has a responsibility towards businesses as well. Unemployment Assistance matters now as the West is in the throes of a crisis.

The Role of Insurance in #MeToo Movement

This article explains how insurance policies can help companies protect their key personnel against #MeToo claims. Details regarding which personnel are covered and what kinds of expenses are covered have been provided in this article.

Why the Flood Insurance Market Should Be Privatized?

This article explains how the flood insurance market works in the United States. It also lists the major shortcomings of the National Flood Insurance Program. Finally, it explains the current as well as the future role that needs to be played by private insurance companies.

Basics of Pet Insurance

This article explains the concept of pet insurance. It also lists the types of pet insurance policies. The rating factors which affect the premium have also been discussed.

Cannabis Insurance

This article explains the insurance needs of the cannabis industry. It explains how state laws and federal laws have different points of view about the legality of the cannabis business. It lists the various insurance products that the cannabis industry is in need of.

Challenges Facing Cryptocurrency Insurance

This article explains why insurance is important in the cryptocurrency market. It also lists the major reasons which act as an impediment for insurance companies to issue such policies.

Evolution of Insurance Regulation

This article explains why insurance regulation is needed. It also explains how the focus of insurance regulation has changed from price regulation to consumer protection.

Food Delivery Apps and Insurance

This article explains how food delivery apps increase the risks of insurance companies. It also explains the measures that need to be taken to mitigate such risks.

How Does Captive Insurance Work?

This article explains the concept of captive insurance companies. It lists many of the benefits that accrue to the shareholders of the parent company when captive insurance companies are used instead of regular insurance companies.

On-Demand Insurance

This article explains the concept of on-demand insurance services. It also explains why these services have come into existence. Lastly, it lists the challenges that on-demand insurance services will have to overcome to become mainstream.

Reinsurance vs. Double Insurance

This article explains the concept of double insurance. It contrasts double insurance with reinsurance to bring out the difference between the two. A comparison based on various parameters has been provided in this article.

Solvency Regulations in the Insurance Industry

This article focuses on the solvency regulations in the insurance industry. It lists some of the common measures that are taken by regulators all over the world in order to insure the solvency of insurance firms.

Terrorism and Insurance

This article explains why acts of terrorism are not covered under insurance. Firstly, it defines what is meant by insurance. Then it explains the major reasons why insurance companies usually exclude risks related to terrorism from their policies.

The Basics of Microinsurance

This article lists some of the biggest challenges faced by microinsurance. It introduces the concept of microinsurance and explains why this financial product is of vital importance to many developing economies in the world.

The Basics of Reinsurance

This article explains the concept of reinsurance. It explains why reinsurance is vital for the smooth functioning of the insurance industry. Lastly, it also lists the various types of reinsurance contracts that are commonly used. The pros and cons of each contract have also been listed.

Types of Captive Insurance Companies

This article lists the different types of captive insurance companies. It explains the utility of each type of captive company and also explains how they are commonly used to save tax or to pool risks.

What is P2P Insurance?

This article explains the concept of peer to peer insurance. It lists the characteristics of peer to peer insurance and also explains the various challenges which are faced by this model as of now.

How Risks Affect Companies Providing Financial Services

This article explains why the financial services industry faces a higher need to implement effective risk management practices. The unique risk factors in the financial services industry have been explained in detail in this article.

Risk Management Information System

This article explains the concept of risk management information systems. It also explains why there is a need for such an information system and also what the advantages of having such a system are.

Disadvantages of Risk Management Information Systems

This article explains the disadvantages associated with risk management information systems. The most prominent disadvantages have been explained in detail in this article.

The Known-Unknown Classification of Risk

This article explains the known unknown framework. It explains how this framework and the associated matrix can be used to classify risks in a manner that makes it easy to mitigate them.

Operational Risk: Definition and Drivers

This article explains the concept of operational risk. It also explains the various drivers of operational risk. Real-life examples of events related to operational risk have also been shared in this article.

How Regulations Have Affected Operational Risk?

This article explains how the management of operational risks became a part of mainstream risk management. It also explains how governments and various regulatory bodies have acted as a catalyst to ensure widespread implementation of these norms.

Identification of Operational Risks

This article explains the process of identification of operational risks. It explains the top-down approach and the bottoms-up approach which are used in most organizations across the world in order to identify risks. Lastly, it also explains why these approaches are not foolproof by discussing their shortcomings.

How to Identify Operational Risks

This article explains the concept of operational risk exposures as well as operational vulnerabilities. It provides some examples of both exposures as well as vulnerabilities. The article also provides a way to differentiate between the two.

Using Internal Loss Data to Mitigate Operational Risks

This article explains the concept of internal loss data. It also explains why the collection of internal loss data is important as well as what the shortcomings of this process are.

External Loss Data in Operational Risk Management

This article explains the concept of external loss data. It also explains why external loss data is useful. Finally, it lays down the limitations of external loss data as well.

Risk Control Self Assessment (RCSA)

This article explains the concept of risk control and self-assessment plan (RCSA). It explains the various stages of the process and the steps that need to be taken at each stage. It also explains the importance of the process.

Scenario Analysis in Risk Management

This article explains the concept of scenario analysis. It also explains the process used to conduct a scenario analysis as well as the limitations of the scenario analysis approach.

Key Risk Indicators

This article explains the concept of key risk indicators. It explains how key risk indicators are an important part of the advanced measurement approach suggested by the Bank of International Settlements (BIS).

Basel Approaches in Operational Risk Management

This article explains the various approaches which have been recommended by the Bank of International Settlements under the Basel norms in order to set aside capital for operational risks. The pros and cons of each approach have been mentioned in this article.

The Basel Risk Categories

This article explains the seven categories of risks that have been propounded in the Basel norms by the Bank of International Settlements. The details of risks in each category as well as their importance have been highlighted in this article.

Cause Categories in Operational Risk Management

This article explains the various cause categories of operational risk management. It then explains how these cause categories help to classify the various types of operational risks and develop mitigation plans for them.

Loss Distribution Approach

This article explains the concept of the loss distribution approach. It explains the importance of the loss distribution approach. Finally, it also explains the step-by-step approach which is used to mathematically derive the loss distribution approach.

The COSO Framework for Internal Control

This article explains the concept of the COSO framework for internal controls management. It explains how the COSO framework was created by combining the work of several organizations. It also explains the three dimensions of the COSO framework and the steps involved in implementing the COSO framework.

Mistakes to be Avoided While Building a Risk Management System

This article explains the list of top five mistakes which need to be avoided while building a risk management system in an organization. The differences between a successful and an unsuccessful risk management system have been explained in detail in this article.

Credit Rating Terminology

This article explains the concept of credit rating terminology. It also explains the different types of terminologies that are used as well as how they should be interpreted.

Credit Rating Terminology

This article explains the different mechanisms there are for measuring exposure. It explains the meaning of terms such as gross, net, potential, and adjusted exposure as well as how these terms are used in the risk management process of any company.

Types of Credit Events

This article explains the concept of credit events. It explains how there are different types of credit events with different impacts on the borrower and lender. The relation between these credit events and the derivative contracts has also been mentioned in this article.

Active Credit Portfolio Risk Management

This article explains the concept of active credit portfolio management. It explains how this approach differs from the traditional approach used by banks. It also explains the advantages of using this approach in the long run.

Metrics to Measure Credit Risk

This article explains why developing metrics to measure credit risk is more complicated as compared to other risks. It also explains the different metrics which are commonly used in the credit risk management process.

Credit Derivatives: An Introduction

This article explains the concept of credit derivatives. It explains how credit derivatives solve many problems and hence are beneficial. It also provides some insight into the shortcomings of these financial instruments.

Credit Linked Note

This article explains the concept of credit-linked notes. It tries to simplify the complicated mechanism of issuing a credit-linked note. It also explains how the cash flow of all parties will be impacted in case different credit scenarios do take place.

How do Credit Default Swaps Work?

This article explains the concept of credit default swaps. It explains how credit default swap contracts work and how they are settled. The benefits derived by various parties by signing this contract have also been discussed in this article.

Why are Credit Default Swaps Dangerous?

This article explains the limitations related to credit default swaps. It explains the various shortcomings with special emphasis on naked CDS which is widely regarded as being a dangerous and destructive strategy.

Total Returns Swap

This article explains the concept of total returns swap. It explains how the total returns to swap can be used to mitigate credit risk arising from purchasing a bond or a portfolio of bonds. Variations of the total returns swap have also been discussed.

What are Collateralized Debt Obligations and How do they Work?

This article explains the concept of collateralized debt obligations. It explains what plain vanilla CDOs are and how they are different from synthetic CDOs. The level of risk inherent in both instruments has also been explained in detail.

Collateralized Debt Obligations: Advantages and Disadvantages

This article explains the advantages and disadvantages of using collateralized debt obligations. The manner in which CDOs create value by repackaging the same assets has also been explained in detail.

Mark To Market Accounting

This article explains the concept of mark to market accounting. It also explains the advantages and disadvantages of using the mark to market accounting and how it helps in managing credit risk.

What are Recovery Rates? - Different Types of Recovery Rates

This article explains the concept of recovery rates. It explains how the recovery rates are defined, the various types of recovery rates as well as the various factors which influence recovery rates.

Netting, Close Out, and Acceleration

This article explains the concept of netting, closeout, and acceleration as it relates to contracts. It also explains how these provisions can be built into the counterparty contracts in order to reduce the credit risk.

Expected Default Frequency (EDF)

This article explains the concept of the expected default frequency (EDF) model. It tries to explain, in simple words, this model which is based on complex mathematical calculations. The basic components of the expected default frequency (EDF) model have been broken down and explained.

Expected Default Frequency: Advantages and Disadvantages

This article provides information about the pros and cons of using the expected default frequency (EDF) model. The list of benefits, as well as shortcomings, has been explained in detail to enable the reader to make an informed decision.

Altman’s Z Score Model

This article explains the concept of Altman's Z score model. It explains the history behind how the model was developed. It also discusses the effectiveness and the shortcomings of this model.

Unexpected Loss and Economic Capital Buffer

This article explains the concept of unexpected losses and economic capital. It also explains how unexpected losses and economic capital are calculated and how this calculation helps in predicting the credit risk with a high degree of accuracy.

Stress Testing in Credit Risk Management

This article explains the concept of stress testing. First, it defines stress testing, and then it explains the various types of stress testing techniques that are used by organizations across the globe.

Provisioning in Credit Risk Management

This article explains the concept of provisioning in credit risk management. It explains how provisioning helps the organization mitigate expected losses in a better manner.

How Corporate Governance Impacts Credit Risk

This article explains the concept of corporate governance. It explains how corporate governance relates to credit risk. It explains some of the common ways in which the interests of creditors are harmed in the absence of appropriate corporate governance.

Exit Strategies In Credit Risk Management

This article explains the concept of exit strategies in credit risk management. It also explains the various mechanisms used while employing exit strategy. Also, it explains the reasons why an exit strategy is important.

What is Market Risk? - How its Measured and Sources of Market Risk

This article explains the concept of market risk. It also explains the basics of how market risk is measured. Lastly, it lists the four common sources of market risk.

Why is Market Risk Management Important?

This article explains the reasons why market risk management has developed so much in the past few decades. The underlying reasons and the relevant macroeconomic factors have been discussed in detail.

Introduction to Value At Risk (VaR)

This article explains the basic concept of value at risk (VaR). It explains why value at risk (VaR) is an important model when it comes to market risk management. It also explains how the value at risk (VaR) number is interpreted in different organizations.

The Three Types of Value at Risk (VaR)

This article explains the three models which are commonly used in value at risk (VaR) calculations. It explains how these models differ from one another. It also explains the advantages and disadvantages of each model.

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