Lesson Notes By Weeks and Term - Senior Secondary 2

Term – 3^rd Term

Week: 11

Class: Senior Secondary School 2

Age: 16 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Insurance

Topic:-       Risk management II

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

1. Discuss risk options in risk management
2. Explain in details the risk management process
3. State the principles of risk management

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

NOTE

RISK MANAGEMENT

Risk options in risk management

Risk mitigation measures are usually formulated according to one or more of the following major risk options, which are:

1. Design a new business process with adequate built-in risk control and containment measures from the start.
2. Periodically re-assess risks that are accepted in ongoing processes as a normal feature of business operations and modify mitigation measures.
3. Transfer risks to an external agency (e.g. an insurance company) 4. Avoid risks altogether (e.g. by closing down a particular high-risk business area)

Risk management process

1. Establishing the context; observing the context, the social scope of risk management; the identity and objectives of stakeholders.
2. Identification; to identify potential risks. Risk identification can start with the source of our problems and those of our competitors (benefit), or with the problem consequences. Risk sources may be internal or external to the system that is the target of risk management
3. Assessment; they must then be assessed as to their potential severity of impact (generally a negative impact, such as damage or loss) and to the probability of occurrence.
4. Risk management plan; select appropriate controls or countermeasures to mitigate each risk. Risk mitigation needs to be approved by the appropriate level of management. For instance, a risk concerning the image of the organization should have top management decision behind it whereas IT management would have the authority to decide on computer virus risks.
5. Implementation; implementation follows all of the planned methods for mitigating the effect of the risks.
6. Review and evaluation of the plan; initial risk management plans will never be perfect. Practice, experience, and actual loss results will necessitate changes in the plan and contribute information to allow possible different decisions to be made in dealing with the risks being faced. Risk analysis results and management plans should be updated periodically.

Note: There are two primary reasons for this: 

1. To evaluate whether the previously selected security controls are still applicable and effective
2. To evaluate the possible risk level changes in the business environment. For example, information risks are a good example of rapidly changing business environment.

Principles of risk management.

1. Create value – resources expended to mitigate risk should be less than the consequence of inaction.
2. Be an integral part of organizational processes
3. Be part of decision making process
4. Explicitly address uncertainty and assumptions
5. Be a systematic and structured process
6. Be based on the best available information
7. Be tailorable
8. Take human factors into account
9. Be transparent and inclusive
10. Be dynamic, iterative and responsive to change
11. Be capable of continual improvement and enhancement
12. Be continually or periodically re-assessed

EVALUATION:    1. Discuss three risk options in risk management

2. In details, explain the risk management process
3. State five principles of risk management

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively