The subject of risk management does not have a long history. It is reported by Ben Hunt that “one of the earliest references to the term “risk management” was in 1956 in the US when it was used in a Harvard Business Review article. Risk is a condition where there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for. There is no requirement that the possibility should be measurable but only that it must exist. Risk is not necessarily a bad thing. In fact, risk-taking is an essential component of a competitive economy. At the same time, an important characteristic of risk is that some losses will actually occur. There is a financial loss when a wage earner dies, or money is stolen or a building is destroyed by fire. Such losses are examples of primary burden of risk and the main factor prompting individuals and businesses to try to avoid risk or mitigate its impact. The focus on risk management, particularly by corporate, has undergone remarkable change over time. There has been a change in regard to concern with gravity of risk.

KEYWORDS:  Risk Identification, Loss Exposure, Flow Charts, Potential Losses, Portfolio, Hedging.