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Risky Thinking
On Risk Management, Business Continuity, and Security
27 May, 2017
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Risk Strategy (Definition)

The choice a company makes for dealing with a specific risk.

The main Risk Strategies are:

  1. Risk Avoidance. Choosing to discontinue or not undertake an operation to avoid the risks involved. (e.g. closing or not opening a branch in a dangerous location.)
  2. Risk Mitigation or Risk Reduction. Taking steps to reduce the probability or impact of a risk.
  3. Risk Transfer. Shifting the risk to another organization by taking out insurance, or sub-contracting an activity to another organziation.
  4. Risk Acceptance. Recognizing the risk but choosing not to take any specific action to control or reduce it. Self-insurance, where a company chooses to pay for losses itself rather than take out insurance, is a form of risk acceptance.

See Also: Risk Avoidance.

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