When you apply for insurance, we as your underwriter will perform a risk management assessment on you. This looks at three key factors: what your world and health look like, and the financial aspects that make up your picture. A risk management assessment is done to help us identify the most appropriate type of insurance cover for you.
However, what if you needed (or wanted) to undertake a personal risk management assessment? Where would you begin and what would you need to consider? Let us explain …
Undertaking a Personal Risk Management Assessment
The goal of any risk management assessment is to accurately identify the real and perceived risks to identify the most suitable level of insurance cover. It involves looking at aspects including the losses which may arise, your level of current and future cash flow and any reputational losses you may occur. To do so, you need to follow a four-step risk assessment process:
- Identifying the risks
- Evaluating the possible insurance solutions which will mitigate these risks
- Implement response solutions with suitable insurance policies
- Re-evaluate the response solutions to ensure they still provide the required level of cover
Purchasing insurance is shifting your levels of risk to the insurer. In return for the cost of the policy, they will assume the risk on your behalf, and provide cover for you should that risk occur.
When Should a Self Risk Management Assessment Be Done?
Realistically, you should review your levels of risk annually. Things happen, and life doesn’t stay still. Nor do insurance policies remain stagnant, as there are continual updates to their terms and conditions. When you do a reassessment, you should be asking yourself:
- Do I have any new risks, such as new hobbies, a career change or a new baby?
- Has there been a reduction in the amount of risk I have? This could be that the kids have left home or you have two salaries in the family now.
- What medical or health events occurred during the year which now needs cover?
- Has there been a change in income and/or savings?
- Have any steps been made to reduce or increase your levels of risk?
- Is the level of cover you have still appropriate?
We recommend that for any risk management assessment you should consult with the professionals first. We’re here to help and are happy to work with you to identify your risk levels to achieve the optimal level of cover for you and your family. Get in touch with us for a no-obligation chat today.