JL_risklogo.png

Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Risk Management Process Basics

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

The Risk Management Process

I decided to take a step back and look at the forest and not the trees in this and some of the next blog posts. The Risk Management Process may look basic, but not following the natural flow can cause an enormous financial burden to small and large companies alike.

Graphic Of Risk Management Process Cycle
StockUnlimited

While working with various organizations, clear differences become apparent between organizations that employ a continuous series of steps to manage loss exposures versus those that don’t. If the organizational goals are clearly defined, an organized, continuous risk management process may be applied.

Such events as pending insurance renewals, serious claims, a merger or acquisition, debt or equity restructurings, or new laws or regulations can initiate a process. With a continuous process, these events can be managed in a more productive and less reactive way.

Solutions

The risk management process consists of six key steps which, when applied in a continuously, result in higher organizational profitability, quality, and asset value.

1. Identification of Losses.

Graphic Risk Management Process Solution
StockUnlimited

There is a wide variety of methods and techniques to identify loss exposures which would interfere with an organization’s objectives. The use of document, compliance, inspection, and expert reviews typically reveals areas in which additional risk management techniques and services should be focused.

2. Analysis of Losses

The analysis of losses is typically reviewed by frequency, severity, total dollar amounts, and timing. This analysis enables an organization to develop projections, prioritize exposures, and allocate risk management resources.

3. Risk Management Techniques.

Loss exposures may be addressed with a wide variety of risk control and financing techniques. These include thousands of different products and services which may be used to deal with very specific risk exposures.

4. Selection of The Applicable Technique.

Once the first three steps have been completed, the techniques that prevent or reduce losses are put into play. All financial and non-financial matters should be taken into consideration.

5. Implementation.

All the various techniques used require immense support and guidance from the organization’s management team and governing body. Without this support, the methods will be less effective and the organization will not adequately meet its defined goals.

6. Monitoring and Revisions.

Acceptable standards and results-based performance measurement throughout the organization is vital. With constant monitoring and revisions, the organization will utilize its risk management for higher financial and social results.

As I previously mentioned, even though this blog centers on Workers Compensation, it is sometimes best to take a step back to the basic steps to prevent and reduce losses.

©J&L Risk Management Inc Copyright Notice

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Table of Contents

Related...

James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

Subscribe

Get the latest workers' comp news FREE!

Name
This field is for validation purposes and should be left unchanged.