How much do you spend now on risk management and how can you reduce it?

If you think you do not want to spend money on risk management, you might be surprised how much you spend. Anything that reduces or controls whether something is going wrong with your business is a risk management cost. Your goal is to find the right balance to get the best possible price from every action.

What is the total cost of the risks?

  • The following are examples of risk management measures:

    • Security
    • Health and Safety
    • Inspection, Repair and Maintenance
    • Internal Audit
    • Customer Service
    • Many Human Resource Elements
    • 19659015] Claims

      • Costs of these are as follows:

        • Tests
        • Accounts Receivable
        • Legal Costs
        • Damages
        • Costs of Repair
        • Sales Loss [19459007[19659021] Part of the above is offset by insurance, but this means that the additional cost of charges should also be taken into account when determining the total cost of the risk. The cost effectiveness of each premium must be revised in relation to the cost of the receivables and the magnitude of potential losses.

          Balance Act

          To understand how much you spend your money, you need to look at these items together and consider how others are doing, such as additional security costs, can reduce your losses by stealing or saving on maintenance may result in more accidents and more claims. Alternatively, you can find that the amount spent on one of the above actions is not justified by the reduction of losses

          The total cost of the risk is too high or too low

          The total cost is also worthy of the total expenditure and noting that over time increases or decreases. If this number is extremely high or low, it is likely to perform further tests. As far as "normal" is concerned, of course, it depends on the nature of the business, but if the cost of the risk is less than 1% of the total cost, it is likely that there are no adequate measures to protect the business from potential threats. if this value exceeds 5%, it is likely that significant savings will be achieved by more effective targeting of expenditure. Even if the ratio is "normal" 2 or 3%, it is probably still advisable to review the measures from time to time to ensure that money is used to reduce the most serious risks, rather than reducing the most important risks

          What would be the risk management

          Quantifying and prioritizing risks and evaluating options using the independent objective view and the experiences of other organizations.

          Look At The Time!

          In assessing the cost of the various components of the total cost of risk, it is important to consider the treatment time of these activities. It is also important to consider how long the management can be saved by an external consultant compared to in-house practice.

          What can I expect?

          So think about the total cost of the risks and how much you can save when you review your risks and control measures.

          Source by sbobet

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