Select Appropriate Risk Management Strategies

Once the risks have been identified and ranked as previously outlined, then the selection and application of strategies can be completed.  Usually, various combinations of strategies will work together to address the identified risks, and it is not unusual to shift to other strategies as new risks become apparent (see Monitoring), or more information accumulates on the risk profile of an activity. 

The following table provides a guide to the general application of the various risk management strategies based on the assessed risk level – Figure 3 provides an illustration of a “risk map” with typical examples of risk by category and the applicable strategies:

High Risk Avoidance
Risk Transfer (Contractual)
Self-Retention
Medium risk
and
High-Medium Risk
Avoidance (if unacceptable risks)
Risk Control
Loss Reduction
Risk Transfer (Contractual, Insurance policy)
Duplication of Resources
Segregation of Exposures
Low Risk Self Retention
Loss Reduction

Figure 3: Simplified Risk Map

Next  - 4. Implement Selected Strategies