The Risk Management Process

Traditional & Enterprise Risk Management Perspectives

  1. The traditional risk management process:
    • Identifying loss and risk exposures – risk identification
    • Evaluate loss and risk exposures (risk assessment – frequency and severity)
    • Select a risk management technique
    • Implement technique or combination of techniques to manage the exposure
    • Monitor and measure success of chosen risk management technique(s)
    • Modify or change risk management techniques if not effective
  2. Risk management techniques:
    • Retain Risk
    • Segregation of Loss Exposures
    • Insurance – Risk Financing
    • Avoidance
    • Loss/Risk Control
    • Best solution is a combination of above
  3. Traditional loss and risk exposures (basic and pure risks such as accidental):
    • Property
    • Workers Compensation
    • Motor Vehicle
    • Crime – External & Internal
    • General Liability (NC Tort Claims Act)
    • Terrorism
    • Contractual Liability
    • Health – Accident & Sickness

Enterprise Risk Management: Managing inter-related risks that can affect the entire organization and institution in regards to business operations, strategy, financial outcomes, and survivability. Organizational interdependency is best categorized.

Common Institutional Enterprise Risk and Loss Exposures (examples)

  1. Disruption of your key inter-dependent departmental operations and services
    • Effects and impacts – internal & external (Business Continuity)
  2. Disruption of your key suppliers of services & materials – contingent risk
  3. Credit risk/systemic risk within financial institutions (sound familiar?)
  4. Regulatory risk – examples: EPA, FERPA, HIPAA, FACTA “Red Flags“
  5. Reputational risk
  6. Monetary, budget and fundraising (grants and donations)
  7. Loss/disruption of personnel resources (H1N1, Avian, Energy Crisis)
  8. Loss of key personnel and succession planning

Summary: It is important that organizations and their departments practice both traditional risk management and enterprise risk management for business survivability and success. The ultimate goal is that every employee at NCSU become a risk manager in their workplace.

Contact IRM as your resource.

  • For property questions call 919-515-1540
  • For Auto call 919-515-6135