Risk Management

In the world of finance, Risk management refers to the practice of identifying potential risks in advance, analysing them and taking precautionary steps to reduce/curb the risk.

The basic methods for risk management—Avoidance, Retention, Sharing, Transferring & Loss prevention and reduction—can apply to all facets of an individual’s life and can pay off in the long run. Here’s a look at these five methods and how they can apply to the management of health risks.

• Avoidance means not participating in activities that could harm you; in the case of health, smoking is a good example.
• Retention acknowledges the inevitability of certain risks. Retirement is one such example where you live on passive income.
• Sharing risk is often implemented through employer-based benefits that allow the company to pay a portion of insurance premiums with the employee. In essence, this shares the risk with the company and all employees participating in the insurance benefits.
• Transferring risk relates to healthcare in that the cost of the care is transferred to the insurer from the individual, beyond the cost of premiums and a deductible. Term Insurance too is another example of transferring your risk to insurer.
• Loss prevention and reduction are used to minimize risk, not eliminate it—the same concept is used in healthcare with preventative care.

By partnering with us, you can make smart risk decisions to improve the chance of reward.

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