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Meaning function and importance of risk financing

Risk Management Functions I. This includes establishing policies and guidelines for risk management programs throughout the twenty-six institutions of the UW System to ensure that the basic objective of risk management — the preservation of System assets both human and physical by the minimization of loss at all institutions — is met at the least possible cost to the System and the State. An institution risk manager is designated by the chancellor at each of the UW System institutions, including UW-Extension and UW Colleges, to carry out the risk management responsibilities, and therefore, is the chief contact for the UW System Risk Managers in carrying out the systemwide responsibilities.

What Is Risk Financing, The Function And The Importance?

Risk management is the process of identifying, measuring and treating property, liability, income, and personnel exposures to loss. The ultimate goal of risk management is the preservation of the physical and human assets of the organization for the successful continuation of its operations. Since the general objective of the University of Wisconsin System is for the efficient delivery of educational services to the people of this State, it follows that the objective of SRM is to maintain smooth operations and peace of mind in the face of risk, as well as an environment which promotes safe and enjoyable learning.

In order to achieve these objectives, delegation of the various risk management functions from System Administration to the institution level is necessary.

It is the policy of the University of Wisconsin System to preserve the assets of the institution and protect the physical well-being of students, employees, and the general public involved in activities occurring both on and off campus.

Preservation of assets and protection of personnel is a responsibility of each institution.

Meaning function and importance of risk financing

Institutions must, therefore, learn to manage those exposures to risk which could destroy or deplete their assets or cause harm to persons. Five basic steps in managing the exposures to loss are as follows: Identification of loss exposures can be achieved before a loss occurs through the use of surveys of operations, inspection of facilities, and questionnaires.

The institution risk manager must analyze the variety of property, liability, income, and personnel exposures at the institution.

Measurement of loss exposures through analysis of the probable frequency and severity of loss can help to reduce the uncertainty involved and lead to corrective action. Alternative risk management tools or remedies exist for every exposure that the institution faces.

Risk Avoidance—eliminate the exposure completely. Risk Control—reduce chance or size of loss, or make the likelihood more certain. Risk Transfer—via insurance or contractual language. Risk Retention—decide to bear the risk at an acceptable level. Since the University System is self-funded for many of the various exposures, it is in our best interest to use risk control, risk avoidance, and risk transfer as much as possible to reduce the cost of retention.

Once a risk management tool s has been chosen, implement the tool according to developed procedures. Monitoring and fine tuning the risk management tools which have been implemented is necessary to achieve the maximum benefit from the risk management effort. SRM is fully responsible for the initiation and implementation of programs which are not addressed by BSRM and which affect the University System specifically.

At the individual institutions the risk manager is responsible for the implementation of all State and Systemwide risk management initiatives as well as any programs which are unique to the institution.

UW System Administration Risk Management Responsibilities Develop, administer, and supervise Systemwide risk management policy, procedure, and planning which includes the development and operation of complex information systems. Develop and administer risk control techniques to reduce the frequency and severity of losses. Develop and administer risk financing techniques so that adequate resources exist to cover losses that do occur. Administer and supervise Systemwide procurement policy as it relates to the special insurance coverage needs of the System and individual institutions.

Assist institutions in the development meaning function and importance of risk financing maintenance of appropriate contractual language to be included in all agreements with parties outside of the Institution. This includes insurance requirements, hold harmless agreements and indemnity clauses. Coordinate the State Self-Funded Liability Program in cooperation with BSRM including general education of University personnel, claims investigation and adjustment, and liability loss control techniques.

Review agent liability coverage request and determine the extent to which student, faculty, staff, and volunteer actions fall within the mission of the institution. Implement the State Self-Funded Property Insurance Program including coverage analysis and determination, claims adjustment and settlement, premium allocation, and loss control.

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Ensure that non-owned and bailed property in the custody of the institution is controlled through inventory and that coverage exists when applicable.

Administer the Master List for all institution-owned facilities as a support to System property reports, loss settlement, and premium allocation. Coordinate a Systemwide claims reporting system, conduct trend analysis and implement appropriate risk control techniques to minimize future losses. University of Wisconsin Institution Office of Risk Management Responsibilities Directly implement all Systemwide and institution-specific risk management policies and procedures.

Administer risk control techniques in order to reduce the frequency and severity of losses and provide feedback to System as warranted.

BREAKING DOWN 'Financial Risk'

Communicate to institution departments the Systemwide procurement policy as it relates to the special insurance coverage needs of the System and individual institutions. Ensure the use of appropriate contractual language in all agreements with parties outside of the Institution. Coordinate the liability program at the institution level by providing in-depth claims reporting and investigation. Provide education to Institution personnel of the liability exposure and liability loss control techniques.

Financial Risk

Review agent liability coverage request and determine, through correspondence with SRM and BSRM, the extent to which student, faculty, staff, and volunteer actions fall within the mission of the institution. Coordinate the property program including investigating claims, determining replacement costs, and subrogating against culpable parties.