Risk Management

Abstract

Companies and other organisations generally need to stabilise their finances, including revenues and profits, from year to year. Therefore, they need to protect themselves against major losses of assets that could expose them to the possibility of a substantial loss of business, so being unable to maintain dividends for shareholders, insolvency or hostile takeover. A problem is that some of the most potentially damaging risks are highly unpredictable. Insurance evolved as a means of protection against financial loss arising from the occurrence of uncertain events causing loss of or damage to property, business interruption or legal liability to compensate third parties for injury or damage.