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RM RISK EVALUATION

involves comparing of the risk analysis with the results the established risk criteria to where additional action determine is required.

RISK Evaluation

THE PURPOSE OF RISK EVALUATION

IS TO SUPPORT DECISIONS.

OUTCOME OF RISK EVALUATION

Should be recorded
communicated and then

validate at appropriate levels of the organization

Risk evaluation, to simply put, is what is

acceptable and what needs to be treated.

involves identifying the range of options available to operators and destinations, making plans, and acting upon them.

Risk treatment

He suggest the use of a risk evaluation mat r ix containing formanagement response options according to the level of identified risk which include risk retention, risk transfer , risk reduction, and risk avoidance

Cuskelly and Auld (1989)

He defined the level of identified risk

Wilks and Davis (2000)

This is a form of self-insurance, whereby the business operator assumes and accepts a certain level of losses.

Risk retention

Is where both the frequency and severity of risk is low, risk is often retain

Risk retention

Retention is either

ACTIVE
PASSIVE

(where risk is identified and a decision is made to retain and pay for any losses from the business operator' s own resources)

ACTIVE

(risks are retained by business operatorwithout the knowledge that they areoccurring)

PASSIVE

The most common example of risk transfer is insurance. When an individual or entity purchases insurance, they are insuring against financial risks

RISK TRANSFER

is where frequency and severity of risk potential are both high, business operators should consider cancelling a program or activity

RISK AVOIDANCE

is where the severity of a potential risk remains low, but the overall frequency of risk is increasing business operators need to consider ways of reducing their exposure.

RISK REDUCTION

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