RISK APPETITE IN BUSINESS STRATEGY
In risk management, the concept of 'risk appetite' is refered to; The degree of response an individual or corporation has toward risk.
There are three types of risk appetites:
1. RISK AVERSE: These people always take safe option at every stage, rarely gamble and will always insure.
2. RISK SEEKERS:These categories of people gamble, not likely to arrange for any insurance cover and always prefer the risky option in any uncertain situation.
3. RISK NEUTRAL: This is a state of non-response to risk.
Insurance is an intangible service, when people or organisations purchase insurance, they do not buy a physical product, what many people purchase are; SECURITY,PEACE OF MIND AND FREEDOM FROM FINANCIAL ANXIETY.
Therefore, it is part of business strategy for financial stability to arrange for insurance cover on risk exposures.
Astute
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