Guide to Risk Assessment News and Trends

Give your company an edge by monitoring the latest developments in the risk management industry

By Lea Terry, Freelance Journalist / Copywriter

1. The impact of your policies and practices
2. Possible threats to your company
3. Specialized risk assessment information pertaining to your industry
   

Action Steps
The best contacts and resources to help you get it done

Subscribe to publications for the risk management industry

Magazines, books and email and print newsletters offer both in-depth and timely coverage of changes within the risk management field. Many of these publications are free and delivered right to your email inbox, offering some of the most current information out there.

I recommend: Risk Management magazine is designed for corporate risk managers, and covers protection of physical, financial, human and intellectual assets. The magazine is published by the Risk Insurance and Management Society. IMRI.com specializes in books, articles and other publications pertaining to risk management. They also offer a free online newsletter

Seek out risk assessment information specific to your industry

Risk analysis and management practices vary widely depending your industry, so focusing on sources specific to your niche may yield the most relevant information for you. Even if one method produced success at one organization, it may be ineffective or even harmful at yours.

I recommend: The Nonprofit Risk Management Center provides information on volunteer risk management, financial risk management, employment practices, and the protection of youth involved in the nonprofit. The Construction Risk Management Portal and Library offers online risk management information, including articles and newsletters, for design and construction professionals.

Stay current by consulting professional associations for the risk management industry

Associations for risk management professionals usually devote much of their time to educating members about the latest news and trends in the industry. These groups offer print and online resources, as well as conferences and seminars.

I recommend: The Fiduciary & Investment Risk Management Association is open to risk managers at banks, trust companies, investment advisors, broker-dealers, insurance companies and other financial institutions. The Security Analysis and Risk Management Association is a nonprofit professional association for those who analyze man-made threats to systems, structures, operations and information systems.

Helpful advice for making the most of this Guide

• •  Just because a trend or method is new doesn't mean it's better than traditional practices. Wait a while to see how other companies fare with new risk management solutions before you implement them at your organization.

Guide to Risk Management Consultants

Working with a risk management expert can help you manage risk effectively

By Lou Bortone, Creative Director, Granite Planet Productions

1. Enterprise risk management – Also referred to as operational risk management, ERM affects all public businesses.
2. Credit risk management – Involves risks associated with banks, lending institutions and related financial businesses.
3. Health risk management – Risks related to hospitals, medical clinics and other healthcare providers.

Action Steps
The best contacts and resources to help you get it done

Know difference between risk management consultants and insurance brokers

Unlike insurance agents, risk management consultants do not sell or broker insurance, and they are not affiliated with insurance companies. Risk management consultants provide independent and objective analysis. They are paid by the client and do not receive commissions.

I recommend: The Society of Risk Management Consultants Web site includes a section that outlines the differences between insurance providers and risk management consultants. If your needs lean more toward typical insurance, the Insurance Industry Internet Network is a web-based directory for the insurance industry.

Understand what risk management consultants can do for your company

Risk management consultants provide risk exposure analysis, and offer evaluation and recommendations regarding coverage and loss control. In addition, they manage marketing and selection of insurance programs and risk-related services.

I recommend: Public Entity Risk Institute (PERI) features extensive resources to help you derive the greatest benefit from your risk management partners. PERI's Web site includes a disaster planning toolkit and publications on risk management for small business. Even if you never hire a consultant, take a look at this risk checklist from PERI for an overview of the range of threats that can face a business.

Know where to find the right RMC for your business

Where to find the appropriate risk management professional will depend upon your industry and your specific needs. There are both generalists and specialists.

I recommend: Directories of risk management consultants include RiskWorld and the SRMC, which provides listings geographically. The Global Association of Risk Professionals (GARP) focuses on risk professionals in financial risk management, while the Nonprofit Risk Management Center features information, training and resources for nonprofit organizations. Bobsguide.com lists risk management consultants from a number of disciplines.

Consider whether your business needs its own Risk Manager

Larger organizations can benefit from a dedicated, in-house risk manager whose job it is to set risk management policy, develop risk response strategies and build a risk-aware culture within the company.

I recommend: Risk Management training and education can be provided by The Institute of Risk Management or the Risk and Insurance Management Society (RIMS). RIMS also features a searchable directory for risk professionals, or you can search resumes for risk managers through their job bank.

Helpful advice for making the most of this Guide

• •  A big risk for small business is the death or sudden departure of a key manager or owner. A risks management strategy would take a look at the succession plan for the company.

Guide to Risk Assessment Basics

Protect your company and the community through risk assessment

By Lea Terry, Freelance Journalist / Copywriter

1. Examining how your policies and practices impact individuals, the community and the environment.
2. Identifying potential risks to your company, and how they can be avoided.
3. Considering a wide array of risk management alternatives.
   

Action Steps
The best contacts and resources to help you get it done

Seek risk analysis advice and support from a professional organization

Professional organizations can connect you to fellow risk management professionals, provide information on risk management solutions, and direct you to risk management training.

I recommend: The Society for Risk Analysis focuses on bringing together professionals from diverse disciplines and sectors. The Risk Management Association is for credit and lending professionals, and the Public Risk Management Association offers support for public sector risk management professionals.

Look for specialized risk management information

Risk management is a broad category that includes everything from identifying risk to creating policies that address it. It also includes risk to and from the organization. And, risk analysis and management will vary widely depending on your industry, whether you're in health care or construction. For the most accurate and relevant risk management solution, find information that addresses your situation.

I recommend: At the U.S. Environmental Protection Agency website, read a guide to ecological risk assessment. The University of California website features a section on Information Technology risk assessment, including components of a risk assessment, an overview of risk assessment methodology, and an online risk assessment tool.

Consult risk management firms

Some larger companies have a full-time risk assessment manager, but if you run a smaller business, or if you have infrequent risk management needs, you may fare better to hire a risk assessment firm.

I recommend: Cardinal Risk Management can help you develop a risk management program, or validate your current risk management solution. ABS Consulting specializes in enterprise risk management.

Helpful advice for making the most of this Guide

• •  Dedicate equal time to management of risk both by and to your organization. It's essential that you protect your company by safeguarding everything from your private information to your financials, but it's equally important to be a good corporate neighbor, by minimizing any negative impact you may on your community and environment.
• •  If you want to keep risk management in-house, provide ongoing training for the employees responsible for this process. In many cases, a simple refresher seminar may be all that's needed to keep your employees on top of the latest trends and practices in the field.

Action Steps
The best contacts and resources to help you get it done

Annualized rate of occurrence

The annualized rate of occurrence is a measure of the probability a specific risk will happen in one year.

I recommend: Risky Thinking provides an example of how the annualized rate of occurrence, combined with annualized loss expectancy, can determine the probability of loss according to the amount of money potentially lost due to risk.

Risk communication

Risk communication happens when an open dialogue of opinion and information exists between those that assess and regulate risks within a company.

I recommend: The World Health Organization provides an expanded definition of risk communication and how a dialogue can be started for an effective risk assessment and risk management plan.

Gap analysis

A gap analysis is a study in which organizations identify the needs when a risk occurs and the actual resources available to help reduce or stop the risk.

I recommend: The Risk Glossary provides an expanded definition of gap analysis in risk assessment.

Inherent risk

An inherent risk is a risk that is not likely to be managed or controlled in any way. In finances, an inherent risk is a misstatement of facts before auditing.

I recommend: The Peer Review Guide provides a list of characteristics related to common inherent risk indicators.

Risk assessment

A risk assessment is the analysis of the work environment and its potential risks. The risks are prioritized and evaluated according to the amount of loss, probability of a loss and the cost of putting countermeasures in place to mitigate the risk.

I recommend: Risk Management, a magazine published by the Risk and Insurance Management Society (RIMS), provides information on the debate of using formal risk assessments as opposed to more modern approaches to assessing risk in a business.

Risk tolerance

The risk tolerance of a business is the ability for that business to survive any losses associated with the determined risks.

I recommend: Enterprise Risk Management provides information on risk appetite and how risk tolerance provides guidance for a business to control a risk's appetite.