Risk Management Process

These flashcards cover key concepts, definitions, and objectives related to risk management discussed in the lecture notes.

Risk Management

A systematic approach to identifying, measuring and controlling risks that can threaten assets and earnings of an organization.

Islamic Perspective on Risk Management

Emphasizes minimizing negative effects of risks and aligning goals with Shariah.

Objectives of Risk Management

Goals aimed at reducing impacts of loss, ensuring organizational survival, and maintaining stability.

Risk Identification

The process by which an organization learns the areas in which it is exposed to risk.

Risk Control

Methods aimed at altering an organization’s exposure to risk to prevent loss or lessen damage.

Risk Avoidance

The proactive decision to avoid or abandon a risk after careful consideration.

Loss Control

Designed to reduce the frequency and severity of losses.

Separation

Dispersing a firm’s assets in multiple locations to minimize loss impact during disasters.

Contractual Transfer

Refers to methods of transferring risk, other than insurance, to another party.

Self Insurance

Setting up a fund to retain loss exposures without transferring the risk to an insurer.

Captive Insurance

An entity established to write insurance for its parent company.