All businesses are exposed to risk in varying degrees. The normal and conventional method of protecting against losses arising from these risks is insurance.

RISK - TWIN UNCERTAINTY

Fundamental to insurance and risk management is the concept of insurable risk, while the question of uncertainty is in turn inherent in the concept of risk.

In the fields of insurance and risk management this uncertainty is fairly precise in a sense that there are two aspects, which are uncertain. In the first instance it is uncertain whether a loss-producing event will ever take place and secondly what consequences the event will have.

These two aspects of uncertainty lend themselves to statistical analysis and a great deal of insurance and risk management work is involved in trying to determine statistically the relationship between the two elements.

THE FINANCIAL CONSEQUENCES OF RISK

Since insurance is a risk financing technique, that is to say, a method of financing losses caused by loss producing events, it is useful to analyse risk in terms of its financial consequences. The insurance market, as well as insurance policies, are, in any event broadly structured to finance those consequences.

The financial consequences of risk are manifested in the following five categories:

1. The costs of physical loss or damage to assets.
2. The consequential losses, which arise out of loss or damage to assets.
3. Pure financial losses, that is, losses not caused by loss or damage to assets.
4. Legal liability losses.
5. Various employee benefit schemes, including costs associated with injury to employees.

TRIDENT CONSULTANTS

Trident Consultants have fully qualified staff and are able to provide a full range of risk management services, use of which will result in the provision of risk reduction recommendations. This will enable Insurers to more accurately underwrite their risks, and insurance customers and potential insurance customers to more accurately assess their exposures to risk. Thus, decisions on the most efficient method of dealing with and financing those exposures can be made.