WHAT IS RISK ??

| There is no definite or commonly accepted

definition of term ´riskµ.
| The meaning of this term is used differently at
different situations.
| Some of the known authorities mentioned risk
as««.
| Boon and Kurtz -risk is the chance of loss or
injury
| Frank h.knight -risk is a measurable un
certainty
| Dannenberg -risk is uncertainty of loss
] ASSIFI]ATION OF RISKS:-
| Property,litability,personal risks.

| Physical,social,economic risks

| Static and dynamic risks.

| Fundamental and particular risks.

| Speculative and pure risks.

PROPERTY, IABI ITY, PERSONA RISKS«..

| Property Risks relates to property arises on

accounts of the loss of business property or the
family property. just like.
fire accidents
natural calamities
motor accidents
| loss happened to any enterprise is called liability
risks.
| Personal risks include person death in family or
death of important member
PHYSI]A ,SO]IA ,E]ONOMI] RISKS«.
| The expected losses to property due to occurrence
of natural calamities like cyclone,fire,floods etc is
called physical risk.

| Social risk are the result of the behavior and

attitude of any person. For example ..employees
strike and civil disturbances.

| Economic risks are the result of uncertainty in

production process, fluctuations.
STATI] AND DYNAMI] RISK«..

| Static risk means which are created due to

human errors.

| Dynamic risks are those«.

which are created due to changes
taking place in business environment.
FUNDAMENTA AND PARTI]U AR RISK«
| Fundamental risks are always connected with
groups.

| Particular risks are originated by the action of a

particular person. such risks can be controlled by
the particular individual.
for example- risks caused due to death or
incapacity of earning member of the family.
Õ


 




| Speculative risks are | Pure risk are those in

risks which may give which there is
profit or loss. possibility of any kind
of profit.
| These risks exists in
business transactions. | Majority of pure risks
are insured by life
| These risks are insurance ,Fire and
generally under taken marine insurance.
by business men
METHODS OF HAND ING RISKS
| Avoidance of risk method.

| Risk reduction method.

| Risk retention method.

| Risk transfer method.

| ]ombination method.

| Hedging method.

| Research method.
AVOIDAN]E OF HAND ING RISK

| This method suggests to keep away from doing any act

involving risks.
| Any of the following methods may be suggested to avoid
risks««..

1. To keep away from any act involving risks.dont drive

scooter to keep away from any possible road accidents.

2. don·t use desert cooler to prevent electric shock.

3. Keep valuable items like cash ,ornaments in bank to

avoid risk.
4. Avoid polluted areas.
| Avoidance of risk is very simple. on business
point of view ,this method is considered to be not
good method.

| Business always avoid risks and uncertainty.

RISK REDU]TION METHOD
| It include some following steps to reduce risk«..

1. In factories, by fencing the dangerous machines,

work never such machines can be protected.

2. No smoking can be one of the reduction of fire

accidents.

3. By installing fire fighting appliances the risk of

loss due to fire accidents can be reduced.
RISK RETENTION METHOD
| In this method of risk handling method, a person
fenced with risks may decide to bear the loss of
risk by himself.

| Some people create a contingency fund of this

purpose .

| arge enterprises can use this method because

they have vast resources«.

| But in small and medium enterprises this risk is

not suitable..
RISK TRANSFER METHOD

Involves
Transfer of heavy risk
w
risk to is


 insurance transferred
company to other
individual
]OMBINATION METHOD
| In this method ««.

The insurance companies or the person or

organization that surrounded by risks, can be use
either all or any two or more risk handling
methods stated above combindly at a time.

The most commonly used combination method is

use of loss prevention method and risk transfer
method
HEDGING METHOD
| Risk can be handled effectively by this method.

| This is followed by business enterprises to reduce

risks.

| This method is just reverse to trading

transactions.
 Market
suggestions
Test in
market when
analysis
introducing
new product

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‡G.B.Anjali
ÿ &ÿ3 ‡D.Anjani

‡D.Gowtham
ÿ
&ÿ ‡Durgar gazal

‡]hetan, G.rajeev
ÿ4&ÿ
ÿ2
‡Ambethkar.M