Risk Management Process

Presented by :RUDI TAMPUBOLON, ST, AAIK, CIIB, AHLI K-3

Main Topics ● Brokers Role in Risk Management &
Insurance
● Four Components of Risk
● Why are there risks?
● What is Risk Management and Why?
● The Risk Management Process
Main Topics – Risk ●
●
3 Phases of Risk Management
Risk Exposures on Business, Projects &

Management ●
Operations
Risk & Considerations
Process (cont’d) ●
●
Why Risk Management
Risk Management
● Benefits of Risk Management
● Risk Management Services you can offer
as a broker
Risk Management
Process
“Total Risk
Management &
Integrated
Insurance
Solutions”
 • Profile the business and the industry
• Meeting with key executives / site visits
• Review current approach to risk management and risk

Integrated
transfer
• Analyze loss statistics and total cost of risk

Approach •
•
Examine options for optimum levels of risk transfer
Review alternatives for managing and financing retained
risk
• Determine most efficient mix of risk retention & risk transfer
• Draft insurance coverage terms and conditions

• Agree on marketing strategy and prepare underwriting

submissions
• Agree acceptable insurers based on service and ratings
• Undertake marketing campaign and refine alternatives
• Negotiate most effective program and execute coverage

• Implement agreed service plan activities

• Monitor changes in business profile and activities
• Monitor changes in insurance and regulatory environment
• Proactively manage claim and risk retention issues
 • Design and document the insurance strategy
• Negotiate with underwriters and provide options
1. Arrange • Implement the insurance policy
Brokers Role in Insurance

Risk Management
& Insurance (as an • Process change in policy condition requests,
business requirements, increase in risk exposures
etc
alternative of risk 2. Provide
policy
• Claims handling
• Insurer-customer meetings
transfer). Support

• Review and report on compliance with current

insurance policy and terms on a quarterly basis.
• Review and report on compliance with insurance
policy and risk management procedures and
3. Review ensure continued compliance within policy
Compliance conditions.
4 components of Resources : Perils:

risks • Assets / Money / Liability

• Human
• Nature (AOG) / People
• Tools / People

Consequences /
Effects: Hazards:
• Loss, Damages • Physical
• Third Party Liability • Moral
• Sick, Injury Death
 Project
Feedstock
Insurers
Supplier
Manufactu

Why are there

rer

Risks?
Government
Business /
Projects

A number of parties involved in a EPC

successful business / project Contractor

O&M
Contractor
Consultan Financiers
t
 ● Please completed

Business/ Exposures Insurance

Project Policy
What is Risk ● Risk Management is a continuous
process that is used to reduce
Management and uncertainty, “uncertainty good and
bad”
Why? ● It can be applied to the entire
organisation, a project, or problem /
opportunity that is being considered.

Why?
To improve business performance -
Increase revenue and reduce costs
 1. Establishing Context: This includes an
understanding of the current conditions

The Risk in which the organization operates on an

internal, external and risk management
Management context.
2. Identifying Risks: This includes the
Process: documentation of the material threats to
the organization’s achievement of its
objectives and the representation of
areas that the organization may exploit
for competitive advantage.
3. Analyzing/Quantifying Risks: This
includes the calibration and, if possible,
creation of probability distributions of
outcomes for each material risk.
 4. Integrating Risks: This includes the
aggregation of all risk distributions, reflecting

The Risk correlations and portfolio effects, and the

formulation of the results in terms of impact on
Management the organization’s key performance metrics.
5. Assessing/Prioritizing Risks: This includes
Process: (cont’d) the determination of the contribution of each
risk to the aggregate risk profile, and
appropriate prioritization.
6. Treating/Exploiting Risks: This includes the
development of strategies for controlling and
exploiting the various risks.
7. Monitoring and Reviewing: This includes the
continual measurement and monitoring of the
risk environment and the performance of the
risk management strategies.
 Risk
3 Phases of Risk Identification
Management
Risk
Evaluation
Analyze, evaluate and review all the
critical details, issues & risks so that
the Insurers
and all stakeholders, FEEL Risk Control
COMFORTABLE with the Insurance
Program.
3 Phases of Risk
Management
Risk Exposures on Risk exposures on Business, Projects &
Operations:
Business, Projects ● Human Capital Assets
● Physical Assets (Buildings, Site
& Operations: Offices, Processing Units,
Maintenance Facilities etc)
● Mobile Assets (Heavy Machinery,
Plant & Equipment, Vehicles)
● Liabilities
 PHYSICAL
• Natural catastrophes
• Adjacent or existing property
Risks & • Transits (Marine & land) and
Storage
Considerations • Additional “Wet Works” (jetties etc)
• Vapour cloud or pool fires
• Heavy or tandem lifting
• Terrorism
LEGAL OR CONTRACTUAL
• Surrounding property
• Professional Indemnity
• Robust liquidated damages
• Tie ins to existing facilities
• Contractor experience
• Safety and environmental concerns
• Contractual structure (EPC etc)
• Political Risks
TECHNICAL
• Unproven or scale up equipment
• Testing and commissioning
• Sub standard quality controls
• Substandard fire protection
• Faulty design, workmanship &
materials
• Highly flammable feedstock
• Tie ins to existing facilities
FINANCIAL – DELAYS
• Loss of revenue / Loss of profit
• Off-taker Credit Risk / Protracted
Default & Insolvency
• Debt servicing of financed
• Increased cost of working
• Force Majeure – non damage
delays (over runs)
Why Risk ● Protect the financial position and
continuity of the organization
Management / ● An increased understanding of the
business in general
Benefits of Risk ● Improved decision making
Management ● Retention of knowledge within the
business
● Improved corporate governance
● Protect stakeholders interests
● Increased employee involvement
Why Risk ●
●
Better allocation of resources
Action plans are more focused
Management ● Reduction in accidents, incidents
and losses
(cont’d) ● Enhance your reputation and
corporate image
● Improved business performance
● Facilitates and enhances the
insurance placement
● Reduction of Total Cost of Risk
(TCOR) (not just insurance
premiums)
Risk Management ● Risk Identification, Mitigation,
Transfer and Management of Risk
Services you can ● Contract Review and drafting of risk
provisions
offer as a broker: ● Production of underwriting
presentations
● Liaison and negotiation on behalf of
our clients with Financiers and
Government bodies (if required)
● Designing exceptionally broad form
policy wordings
Risk Management ●
●
Marketing of risks
Claims management and consultancy
Services you can ● Insurance Consultancy
● Provision of insurance/reinsurance
offer as a broker: market intelligence
● Construction Risk
(cont’d) Management/Engineering
Thank You

Stay Healthy……..

Q&A