Glossary

Risk financing refers to achievement of the least-cost coverage of an organization's loss exposures, while ensuring post-loss financial resource availability.

A risk gap is the difference between the net premium plus capital and surplus and net retained insurance or reinsurance limits.

Risk identification is the first step in the risk management process and involves the qualitative determination of risks that are material—that is, that potentially can impact the organization's achievement of its financial and/or strategic objectives.

Risk index measures the average losses for a homogeneous group of risks, used for risk pricing purposes.

Risk management is the practice of identifying and analyzing loss exposures and taking steps to minimize the financial impact of the risks they impose.

A risk management information system (RMIS) is a very flexible computerized management information system that allows the manipulation of claims, loss control, and other types of data to assist in risk management decision-making.

The risk management process is the process of making and implementing decisions that will minimize the adverse effects of accidental business losses on an organization.

Risk management techniques are the methods for treating risks.

A risk manager is the individual responsible for managing an organization's risks and minimizing the adverse impact of losses on the achievement of the organization's objectives.

A risk map is a graphical depiction of a select number of a company's risks designed to illustrate the impact or significance of risks on one axis and the likelihood or frequency on the other.