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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)

Ask by Conner Rose. in South Africa
Mar 14,2025

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Risk management strategies include: 1. **Risk Avoidance**: Eliminating the risk by avoiding activities that pose threats. 2. **Risk Reduction**: Minimizing the likelihood or impact of risks through safety measures. 3. **Risk Sharing**: Distributing risks to other parties, like using insurance. 4. **Risk Retention**: Accepting and managing risks that are low in impact or cost-effective to handle. These strategies help organizations manage and mitigate potential risks effectively.

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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.

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