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What are the Different Types of Risk Management Tools?

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  • Written By: Matthew Brodsky
  • Edited By: Jenn Walker
  • Last Modified Date: 27 October 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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Risk managers have multifaceted jobs within most companies, nonprofits, and government entities. They are responsible for helping organizations identify risk, assess risk, and then reduce risk, among other things. The main goal of this position is to prevent an unfortunate event from sinking an organization's bottom line. To help a company or entity succeed and mitigate risks, risk managers really on several risk management tools. These risk management tools include risk management information systems (RMIS), incident management systems, certificate managers, business intelligence tools, enterprise risk management solutions, and catastrophe models.

RMIS risk management tools are computer software programs that allow a risk manager to keep track of his organization's risks. This risk management software allows users to identify risk and manage the exposure. To help reduce risk, the RMIS system allows users to track all of their insurance policies. When an unfortunate event happens, the tool can help risk managers manage all claims and lawsuits.

Incident management systems are risk management tools that help risk managers handle situations when an unfortunate event happens. These tools can be deployed within the organization so supervisors and managers can track when accidents occur within their departments and employees get injured. When customers get hurt during a visit to the company, the incident management system can also handle the reporting of these claims as well.

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Larger organizations can have many insurance policies in their attempts to reduce risk. These insurance policies can be annual contracts for property or casualty risks. On the other hand, they can be for one-off special events or for vendors and partners. One of the risk management tools called certificate management systems can help risk managers keep track of all their insurance contracts.

To assist in preventing risks, risk managers can turn to business intelligence tools. These allow risk managers to mine their wealth of claims and incident data. This can lead to the detection of patterns and ways to identify risk before it occurs. By drilling into their data in such a way, risk managers can create loss prevention programs to reduce risk for those patterns they uncover.

Other risk management tools include catastrophe models. This risk management software allows risk analysis of an organization's disaster exposure to such events as hurricanes, earthquakes, floods, thunderstorms, and winter events. These tools also allow risk managers to calculate the event probability for a given disaster. Risk managers can then gauge how well prepared they are at given offices, warehouses, and other properties for these events and ensure their disaster preparedness plans and catastrophe insurance policies are inline with the probabilities.

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