Risk management and insurance is the study of methods used by organizations and individuals to manage activities whose outcomes cannot be forecast exactly, i.e., measures taken to reduce the risk of damage to physical assets, exposure to legal liability, or injury to employees or customers. In organizations, the purpose of risk management is to enable the organization to progress toward its goals and objectives on a direct, efficient, and effective path. As such, risk management is a central management function, devoted to the management of uncertainty and its effect on the organization's progress toward its mission.
Risk management is an element of virtually any area of management specialization.
For example, safety procedures and damage control programs of an organization can have a dramatic effect on the injury rates for employees and on the amount of damage resulting from natural events and acts of humans. Management of employee benefit programs also can have significant effects on the cost of providing these programs. Students wishing to pursue studies in risk management and insurance should have a firm grasp of business principles as well as an interest in applying principles from law, finance, and quantitative methods. Those planning to pursue careers related to marketing insurance and financial products should have an interest in working with the public as well. Career Opportunities in Risk Management and Insurance Risk management and insurance is recognized as an important field of activity by many corporations, hospitals, and government units.