Risk management

For risk management, it is important to identify and prioritise risks (defined in ISO 31000 as the effects on goals) before coordinating and using resources to reduce the possibility or impact of unfortunate occurrences or optimise opportunities.

Uncertainty in the international markets, threats from project failures (at any stage in the design, development, production, or maintenance of life-cycles), legal responsibilities, credit risk, accidents and natural disasters, an adversary's deliberate attack, or events with an uncertain or unpredictable root cause are examples of risk.

Events may be categorised as either a danger or an opportunity, depending on whether or not they are favourable or negative. The Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards have all established risk management standards. As a result, risk management strategies vary greatly depending on the environment in which they are used. This is true for projects as well as actuarial evaluations as well as for industrial processes and financial portfolios. While certain risk management guidelines have been criticised for having no observable impact on risk, trust in estimates and judgments seems to be increasing.

It is possible to deal with threats by avoiding them, decreasing their negative impact or likelihood, shifting all or part of their consequences to another party (or keeping them all), and even preserving some or all of the real repercussions associated with a specific danger. To take advantage of new possibilities, try the polar opposite of these approaches (uncertain future states with benefits).

An insurance risk manager will "oversee the organization's entire risk management programme, identifying risks that might jeopardise the organization's reputation," and then "create measures to avoid and/or mitigate any bad financial results," as a professional position. As soon as risk data has been gathered and analysed, analysts present their findings to their managers, who utilise the information to choose from a variety of alternative remedies. These positions include the Chief Risk Officer, the Internal Auditor, and the Financial Analyst – Corporate and Other.