Module 8: Risk Management (Insurance Institute of India)

Learning Outcomes

သင်ယူရမည့်ရလဒ်များ (Learning Outcomes)

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Key Concepts | အဓိကအကြောင်းအရာများ

1. Peril (အန္တရာယ်ဖြစ်စေနိုင်သောအဖြစ်အပျက်)

• Events that cause loss (e.g., fire, flood, earthquake).
• Example: Fire in an office is a peril.

2. Risk (အန္တရာယ်)

• Uncertainty of outcome.
• Example: Living near a sea exposes one to tidal wave risk.

3. Hazard (အန္တရာယ်မြှင့်တင်သောအခြေအနေ)

• Conditions that increase the chance of loss.
• Types: Physical Hazard (e.g., loose wiring), Moral Hazard (e.g., dishonesty).

4. Types of Risks | အန္တရာယ်အမျိုးအစားများ

• Catastrophic vs. Important Risks
• Financial vs. Non-Financial Risks
• Dynamic vs. Static Risks
• Pure vs. Speculative Risks
• Fundamental vs. Particular Risks

4.1️⃣ Catastrophic vs. Important Risks

Catastrophic Risks (အလွန်အရေးကြီးသောအန္တရာယ်များ)

• These are large-scale risks that can cause bankruptcy or massive destruction.
• Example: Earthquake, tsunami, or a fire destroying an entire factory.
• Affect many people or businesses at once.

Important Risks (အရေးကြီးသောအန္တရာယ်များ)

• These are serious but not devastating.
• Example: Credit card debt, temporary job loss, or stock market crash.
• Affect finances but are recoverable over time.

4.2️⃣ Financial vs. Non-Financial Risks

Financial Risks (ငွေကြေးဆိုင်ရာအန္တရာယ်များ)

• Can be measured in monetary terms.
• Example: Loss in property value, stock market fluctuations.
• These are insurable.

Non-Financial Risks (ငွေကြေးမဟုတ်သောအန္တရာယ်များ)

• Cannot be measured in money.
• Example: Emotional loss, reputation damage, mental stress.
• Not directly insurable, but some consequences (like treatment costs) may be covered.

4.3️⃣ Dynamic vs. Static Risks

Dynamic Risks (အပြောင်းအလဲဖြစ်သောအန္တရာယ်များ)

• Arise from economic or social changes.
• Example: Inflation, political instability, changing consumer behavior.
• Less predictable and not easily insurable.

Static Risks (တည်တံ့သောအန္တရာယ်များ)

• Exist regardless of economic changes.
• Example: Theft, fire, dishonesty.
• More predictable and better suited for insurance.

4.4️⃣ Pure vs. Speculative Risks

Pure Risks (သန့်ရှင်းသောအန္တရာယ်များ)

• Only involve loss, no chance of gain.
• Example: Death, fire, accident.
• Insurable.

Speculative Risks (ခန့်မှန်းမှုအန္တရာယ်များ)

• Involve both loss and gain.
• Example: Gambling, stock trading, lottery.
• Not insurable.

4.5️⃣ Fundamental vs. Particular Risks

Fundamental Risks (အခြေခံအန္တရာယ်များ)

• Affect large groups of people.
• Example: Natural disasters, war, inflation.
• Often require government or community-level solutions.

Particular Risks (တစ်ဦးချင်းအန္တရာယ်များ)

• Affect individuals or specific entities.
• Example: Theft in one house, car accident.
• Insurable through personal policies.

📝 Summary Table | အကျဉ်းချုပ်ဇယား

5. Risk Management Techniques | အန္တရာယ်စီမံခန့်ခွဲမှုနည်းလမ်းများ

• Avoidance – Prevent the risk
• Reduction – Minimize impact
• Retention – Bear the cost internally
• Transfer – Use insurance or indemnity

6. Loss Reduction Techniques | အရှုံးလျှော့ချနည်းလမ်းများ

• Separation, Duplication, Diversification
• Hedging and Indemnity Agreements

7. Individual Risk Retention | တစ်ဦးချင်းစီအန္တရာယ်ခံယူမှု

• Choosing not to insure transfers risk to dependents.
• Example: No life insurance means family bears financial burden after death.

8. Comparison Table: Peril vs. Risk vs. Hazard

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❓ FAQs (Frequently Asked Questions)

1. What is a peril?
   A peril is an event that causes loss, like fire or flood.
   Peril ဆိုသည်မှာ အရှုံးဖြစ်စေနိုင်သောဖြစ်စဉ်တစ်ခုဖြစ်သည်။

2. Can insurance prevent a peril?
   No, it only reduces financial impact.
   မဟုတ်ပါ၊ အန္တရာယ်ကိုတားဆီးမထားဘဲ ငွေကြေးအကျိုးသက်ရောက်မှုကိုသာလျှော့ချသည်။

3. What is risk?
   Risk is the uncertainty of outcome.
   Risk ဆိုသည်မှာ ရလဒ်မသေချာမှုဖြစ်သည်။

4. What is a hazard?
   A hazard increases the chance of loss.
   Hazard ဆိုသည်မှာ အန္တရာယ်ဖြစ်နိုင်မှုကိုမြှင့်တင်သောအခြေအနေဖြစ်သည်။

5. What are moral hazards?
   Dishonest behavior that increases risk.
   မကောင်းသောအကျင့်ကြောင့် အန္တရာယ်မြင့်တက်ခြင်း။

6. What is risk retention?
   Choosing to bear the cost of loss yourself.
   အန္တရာယ်ကိုကိုယ်တိုင်ခံယူခြင်း။

7. What is risk transfer?
   Passing the risk to another party, like an insurer.
   အန္တရာယ်ကိုအခြားသူထံပေးပို့ခြင်း။

8. What is duplication in risk management?
   Keeping backups to avoid total loss.
   အရှုံးအပြည့်အဝမဖြစ်စေရန် မိတ္တူများထားခြင်း။

9. What is diversification?
   Spreading risk across different areas.
   အန္တရာယ်ကိုအမျိုးမျိုးသောနယ်ပယ်များတွင်ဖြန့်ဝေခြင်း။

10. Why is ethical consideration important in risk management?
    It ensures responsible decision-making.
    အန္တရာယ်စီမံခန့်ခွဲမှုတွင် တာဝန်ရှိသောဆုံးဖြတ်မှုများအတွက် သက်ဆိုင်သည်။

11. What is the difference between catastrophic and important risks?

    • Catastrophic risks cause massive damage and can lead to bankruptcy.
    • Important risks affect finances but are recoverable over time.

12. Can non-financial risks be insured?

    • Generally, non-financial risks like emotional loss or reputation damage are not insurable, but related financial consequences (e.g., treatment costs) may be covered.

13. Why are static risks more suitable for insurance than dynamic risks?

    • Static risks are predictable and occur regularly, making them easier to assess and insure.

14. What is the key difference between pure and speculative risks?

    • Pure risks involve only loss and are insurable.
    • Speculative risks involve both loss and gain and are not insurable.

15. How do fundamental and particular risks differ?

    • Fundamental risks affect large groups (e.g., natural disasters).
    • Particular risks affect individuals (e.g., theft in a house).