RMI 2101 Lecture Notes - Lecture 2: Income Statement, Financial Statement, Risk Management

• School: Temple University
• Department: Risk Management and Insurance
• Course: RMI 2101
• Professor: John V.Dormuth( P)

Document Summary

The risk management process: decision making process. To manage pure risk-events or activities facing a firm or an organization. Trm= pure risk (traditional risk management, loss or no loss) Uses a risk management decision making process. Series of steps: functional area of a firm or organization. Make use of risk management decision making process: identify loss exposure, analyze loss exposure, examine feasibility of risk management technique, select appropriate technique, implement technique, monitor results, evolution of risk management over time. 1950s-1960s: firm(cid:495)s didn(cid:495)t (cid:494)manage risk(cid:495, purchased insurance. Early 1960s: dr. h wayne snider (temple university professor, strategic move from insurance buying to managing risk, temple is considered to be the birth place of risk management as a concept. )dentify (cid:494)exposures(cid:495) to loss or loss exposure (cid:523)item exposed to loss(cid:524) (cid:523)ex. a ship carrying cargo, the cargo is what can be lost) Can lead to bankruptcy: loss exposures- 3 elements. Financial consequences: methods of exposure identification.