Approaches to Risk Management: A Critique

Many types of hazards confront individuals, families, communities, businesses, and nations. Individuals face immediate danger from accidents and acute disease. They face longer term danger in the form of chronic disease. Financial hazards loom in the form of unemployment, assets becoming worthless, large liabilities emerging, expenses for housing or children's education, and the termination of earned income at retirement. . Should an unfortunate event occur, such as a financial loss or severe injury, the enjoyment of life is diminished. Indeed, happiness can be compromised simply by the prospect that such an unfortunate event may occur. Risk management attempts not only to mitigate the effects of some unfortunate event, but to prevent its occurrence.