Risk Identification and Risk Control

Risk Identification

Is perhaps the most crucial step in the entire process. Risk identification must start by identifying the sources of risk. Risk emanates from the following souces:

• The physical environment


• The social environment


• The political environment


• The legal environment


• The operational environment


• The economic environment

Risk identification is critical as it determines the effectiveness with which risks facing the organization will be tackled.

Risk Control

Includes techniques, tools and strategies that seek to avoid, prevent, reduce or otherwise control the frequency and/ or magnitude of loss. Risk control measures include:

• Risk avoidance - if risk emanates from man's interaction with the environment then abandoning a venture also avoids the attendant risk.


• Loss prevention - seeks to reduce the number of losses or to eliminate them completely. Loss prevention measures seek to alter/modify the hazard, alter/modify the environment in which the hazard exists and/ or intervene in the process whereby hazard and environment interact.


• Loss reduction - aim to reduce the potential severity of a loss should it occur e.g.,springkle systems. Loss reduction measures are post-loss measures hence they are tacit admission on the part of the risk manager that some losses will still occur despite the organizations best efforts.