Risk Transfer

Risk Transfer

Remember the first Rule "Donít risk more than you can afford to lose" and the third Rule "Consider the odds" of Risk Management from Mehr and Hedges!

The risk policy measure of risk transfer aims to transfer the impacts of risks wholly or partially to third parties. In the process, the risks may have been already minimised in a previous step through suitable measures. A risk transfer, particularly in view of securing continued corporate existence, is especially viable for risks that entail excessive damage. However, a note is due here that on the occurrence of a risk, transfer of respective impacts alone at times is not sufficient to safeguard continued corporate existence. Also in the context of risk transfers, one should be aware that this is a service that entails a price payable to the risk carrier. For these reasons, always the question arises about the ideal form of risk transfer for an enterprise. Yet in order to be able to determine the ideal form of risk transfer, a firm needs to know the risk functions subject to transfer.

So the challenge for a Risk Manager is to calculate the expectancy values T{R(x)i(mean)} and T{R(x)i(worst)} and some Value-at-Risks P{R(x)i(VaR)}.

 

Our Enterprise Risk Manager Software supports you by calculation of these values.

Risk Optimization