Learning from History-A Risk Management Perspective

Abstract

Though risk management and its application in the corporate world are new, its essence is very old. One must remember that risk is always about the future and the future is always unknown. There is no idea what will unfold in the future, however, some ideas about the future can be assessed based on past data, present information, and judicious judgment about the future. In the life insurance business which is about long-term assessment of risk is based on similar methodologies. Life insurance businesses have been successful throughout the world based on actuarial principles.

To address any risk, it is very important to first identify the risk, assess its likely impact, and plan for preventative action now, to minimize the impact of the risk, should risk materializes. Risk assessment requires a mindset with a vision to anticipate the future based on certain key risk indicators of the present which always emanate important information about the expected future.

In the very recent past we witnessed economic slowdown resulting from reduced economic activities, the key question that is addressed in this article is, could this have been anticipated to address the economic risks to take mitigating actions earlier than later

Keywords: Risk Management, Risk Mitigation, Enterprise Risk Management, Operational Risk, Risk Culture,

JEL Classification: G10, G20. G21, G22, G23, G24, G25, G26, G27, G28, G29