management process identifying potential losses evaluating them selecting the

Management process identifying potential losses

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management process: identifying potential losses; evaluating them; selecting the appropriate techniques for handling them; and administering the program. However, Skipper (1998) cited [ CITATION Rom04 \l 1033 ] in his study also suggested a three- step process that will contribute to the value of the firm: identification and evaluation; exploration of the techniques; implementing and periodic review. Dorfman (1998) stated that first of three steps in solving any problem is recognizing that a problem exists. His opinion of the risk management process include: identifying and evaluating loss exposures; implementing the most effective method of dealing with them; and monitoring outcomes. According to Harrington and Niehaus (1999), there is a five step process to risk management which are: identifying; evaluating; developing and selecting methods; implementing; and monitoring. In essence, it is quite obvious that there is no a systematic or agreeable tool, model or technique to risk management. Every organization has its own suitable model, tools or techniques in managing its risks depending on the nature and objectives of the organization and the nature and severity of the risks. 2.1.3The concept of Insurance and its role in the Economy In the last 20 years, renowned economists and financial analysts in their epoch making have reacted to Keynesian and the post- Keynesian analyses by swaying from macro-economies or by focusing more narrowly on inflation and structural factors, rather than liquidity. At the same time, they have not really called into question the basic belief of the Keynesian paradigm, according to which the central bank controls economic liquidity by controlling money supply, until recent financial crisis that have understandably shaken their convictions. First of all, the crisis that rocked the economies of South- East Asia underscored the importance of liquidity in driving market efficiency, and the pivotal role that financial institutions could play quite independently of the central banks. Secondly, the Japanese crisis has called attention to the
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special role played by the insurance industry in ensuring economic liquidity, a role that is often insufficiently understood. Of particular significance is the fact that although the insurance industry cannot play a counter- cyclical role with respect to global demand, it can nonetheless play just this role with respect to financing the economy. However, the term insurance according to [ CITATION Tra01 \l 1033 ] is above all a promise to compensate or indemnify the consequences of a loss-producing even or more generally, a risk whose contours have been delineated in advance. The risk factor must be present in all type of insurance coverage- property, casualty, and life. In which the presence of the risk factor differentiates a savings product from life insurance product, and banking from insurance.
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