1 The expansion of the role of insurance buyer into that of risk manager and

1 the expansion of the role of insurance buyer into

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(1) The expansion of the role of insurance buyer into that of risk manager and the creation of a recognized discipline; (2) The educational need to improve the intellectual and practical capability of today’s and tomorrow’s manager, which the second is a direct product of the former. 2.1.2 Tools or Techniques of Risk Management During the last decade, a major surge of interest arose in improving our ability to deal with uncertainty, most notably with its negative impact at the organizational level. This has led to the development and application of tools, techniques, and methodologies which are classified under the label of risk management. From a comprehensive survey that was conducted with the aid of the librarian of the Standard Institute of Israel, Nine standards were identified consisting of six national or international standards that were developed or adopted by standardization bodies, and three standard that were developed by professional organizations with an interest in risk management, which were published recently with the earlier publication on 1997. Included are the various standards that were identified; Institute of Electrical and Electronic Engineers, USA (2001), International Electrochemical Commission, Switzerland (2001), Japanese Standards Association (2001), Standard Australia/ Standard New Zealand (2004), British Standard Institution (BSI) (2000), Canadian Standards Association (CSA) (1997), Association for Project Management (APM)UK,(2004) and Project Management Institute, USA (2004). However, none of the stated standards are currently used for certification purposes, though in 2
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some cases these have been proposed and it’s been actively pursued towards the achievement of organizational goal [ CITATION Hil05 \l 1033 ].This indicates that, risk management can be described as the performance of activities designed to minimize the negative impact (cost) of uncertainty (risk) subject to possible losses. According to [ CITATION Rom04 \l 1033 ], risk management model can be viewed as either a descriptive theory that reflects current practice or perspective theory that suggests a refinement of practice. As the perspective theory t is better understood, it should approach a standard of excellence to be used as a model. However, we do not find a standard perspective model for risk management process; it is presented in many different versions. Many reflect a variation of the model as proposed I n texts theory by C. Arthur Williams, Jr. For instance, the model in the sixth edition of Williams and Heins (1989), contain six steps: Defining the objective the organization wishes to achieve; identify loss exposures; measuring the potential losses; selecting the best ways to solve the problem; implementing the decision made; and monitoring and evaluating the decisions. However, (Williams et al, 1998) in his sixth edition, risk management model quoted in [ CITATION Rom04 \l 1033 ] presented five steps to risk management by firms including; mission identification; risk assessment; risk control; risk financing; and program administration.
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