Risk handling

How do you deal with risk in your company?

Risks can be handled at the level of cause and effect:

Measures taken at the level of cause help avoid or mitigate risk (loss prevention), in the sense that the likelihood of occurrence is reduced. On the other hand, measures taken at the level of effect have an impact on the repercussions of an event that has already occurred. The extent of those repercussions is lessened (loss minimization).
On the other hand, there are also financial solutions (balance sheet protection) available for risk handling, which do not affect the risk in a qualitative way. With risk transfer, the event occurs with all its repercussions, but the financial consequences are passed on to a partner.

If the company bears the risk itself, it must accumulate equity capital or reserves or have deductibles in its insurance policy.

Depending on the size of the enterprise, various financial solutions are available to companies for transferring and bearing their own risk. So captive and other solutions for financing risk, as well as asset management services, should be included in the considerations.