Risk Identification and Assessment
Identify, analyze, and evaluate your risk exposures, risk retention, or risk transfer.
Risk identification and assessment are essential processes in the field of insurance that aim to help individuals and businesses manage potential risks effectively. By identifying, analyzing, and evaluating risk exposures, we can assist you in making informed decisions regarding risk retention or transfer.
Identifying risks is the first critical step in the risk management process. This involves recognizing and understanding potential risks that could negatively impact an individual or business. In the context of insurance, this may include risks such as property damage, liability claims, natural disasters, or business interruption. By identifying these risks, we can work with you to develop a comprehensive risk management strategy tailored to your specific needs.
Once risks are identified, the next step is to analyze and assess them. This entails evaluating the likelihood of a risk occurring and the potential impact it could have on your business. Through quantitative and qualitative analysis, we can assess the severity of risks and prioritize them based on their significance. This analysis helps in determining the appropriate level of insurance coverage needed to mitigate the impact of potential risks.
After assessing risks, you are faced with the decision of whether to retain or transfer the risk. Risk-retention refers to the strategy of assuming the financial consequences of risk within an organization, either partially or fully. On the other hand, risk transfer involves transferring the risk to an insurance company through the purchase of insurance policies. The decision between risk retention and transfer is influenced by factors such as risk tolerance, financial capabilities, and the cost-benefit analysis of insuring against a particular risk.
The process consists of 4 simple steps conducted by AMG:
- Identify potential risks that could impact the organization and classify each risk into categories.
- Rate each risk based on impact and likelihood, and provide rationale and understanding of root causes related to each risk
- Prioritize top-rated risks to ensure the right ones are managed going forward.
- Develop specific action plans to address the risks.
In addition, AMG uses the cost of risk to guide the formulation and evaluation of a risk management strategy. This cost includes any retained losses, such as deductibles or exclusions; the cost for loss control activities; claim management expenses; net insurance proceeds; and the administrative costs of maintaining the risk management program itself.
AMG can help assess and document a company’s “risk profile” and determine whether the current insurance and risk management program provides adequate and cost-effective protection.
Contact AMG
We provide risk management, risk consulting, insurance broking, insurance program management and claims advocacy services.