SECTION B: APPLICATION Question 3: General principles of risk management and insurance law [20] 3.1. Risk management is defined as the process of identification, analysis, prioritisation and implementation of strategies to minimise, monitor and control the probability and/or impact of unfortunate events. List and briefly discuss four (4) risk management strategies.(4)
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One effective risk management strategy is risk avoidance, where an organization decides to eliminate a risk entirely by choosing not to engage in the activities that could lead to the risk. For example, a company might refuse to invest in high-risk markets to avoid potential financial losses. Another important strategy is risk mitigation, which involves implementing measures to reduce the severity or likelihood of a risk. This could include adopting safety protocols, investing in better technology, or conducting regular maintenance on equipment to prevent accidents or failures.