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implementing antivirus software.

The question of minimizing a loss and preventing future causation of a loss should not also lose sight of.

Keeping these factors in view would come up the question of properly rating a risk, as this would be the basis of charging premium or price for running a risk. In this context of risk management the ’’mathematical valuation of risk” is indeed important.

7 steps of risk management are;

  1. Establish the context,
  2. Identification,
  3. Assessment,
  4. Potential risk treatments,
  5. Create the plan,
  6. Implementation,
  7. Review and evaluation of the plan.

The risk management system has seven(7) steps which are actually is a cycle.

steps of risk management process

1. Establish the Context

Establishing the context includes planning the remainder of the process and mapping out the scope of the exercise, the identity and objectives of stakeholders, the basis upon which risks will be evaluated and defining a framework for the process, and agenda for identification and analysis.

2. Identification

After establishing the context, the next step in the process of managing risk is to identify potential risks. Risks are about events that, when triggered, will cause problems.

Hence, risk identification can start with the source of problems, or with the problem itself.

Risk identification requires knowledge of the organization, the market in which it operates, the legal, social, economic, political, and climatic environment in which it does its business, its financial strengths and weaknesses, its vulnerability to unplanned losses, the manufacturing processes, and the management systems and business mechanism by which it operates.