Inspection Presentation
Export of Docs to the
order Buyer
Culminates into
Shipment Importer’s
(Buyer’s) Bank
Assembling
Documents
Exporter’s (seller’s)
Negotiation Invoice , packing Bank
Submit
between Buyer and list , transport Documents
seller document viz.
Export process
Buyer
Makes
payment
Importer’s
(Buyer’s) Bank
Collects the
Exporter’s payment remit
(seller’s) Bank it to
3. Lodgment
7. Payment
of
5a. Payment 5b. Shipping documents shipping
4. Shipping documents
6. Payment Remitting
Presenting Bank
Bank
Ucp 600
incoterms
incoterms
incoterms
Risk management
Risk
üRisk is the possibility of an unfortunate
occurrence.
üRisk is the possibility of loss.
üRisk is a combination of hazards.
üRisk is uncertainty of loss.
üRisk is the tendency that actual results may
differ from predicted results.
Difference Between Static and Dynamic Risks
Non-financial Risk
This type of risks may be during the selection of career, the choice of
marriage partner, etc. These may or may not have any financial implications and
are difficult to measure.
Pure Risk
Pure risk are those which have only two outcomes, i.e., loss or no loss.
Whereas speculative risks involves the situation where is a possibility of gain
.e.g. investment in shares.
Fundamental Risks
Fundamental risks are those risks which are there because of the problems
relating to the major factors such as exchange of economic, social, cultural, and
political.
Business Risk
It is concerned with possible reduction in business value from
any source. Unexpected changes in future net changes in future net cash
flows are major source of fluctuations in business value.
(i) Price Risk : Price risk arises due to magnitude of cash flow due
to changes in out put and input prices. Output price risk due to the risk of
changes in the prices which may change due to the change in the demand
for the goods
(ii) Credit Risk : Credit risk arises because of the delay or failure in
making promised payments by the customers and other parties. Credit
risk is high in case of financial institutions, commercials banks, etc.
Personal Risk
Personal risks are the risks faced by individuals and families.
There are number of personal risks like earning risk, medical expense
risk, liability risks, physical assets risk, financial asset risk and risk of
longevity.
risk associated with International
trade
Payment Risk
Credit Risk
Transport related Risk
Exchange fluctuation Risk
Political Risk
Investment Risk
Product liability Risk
Legal Risk
Cultural Risk
Risk Management
5. Principle of evaluation
This principle states that each available alternative has to be evaluated
properly from all the angles, i.e. financial, market etc.
9. MaximizingNet
value by flow
Cash minimizing the cost
= Cash Inflow of risk.
– Cash outflow
Unexpected increases in losses that are not offset by cash inflows from
insurance contracts, hedging, arrangements or other contractual risk transfers
increase cash outflows and reduces generally cash inflows which will reduce the
value of share of firm
Uses of RMIS
8. For reporting
9. For claim adjustment process review
10. For examination about reasons of accidents.
Problems of RMIS
Ø Incompatibility of software
Ø Poor system documentation
Ø Impurity of data
Ø Lacks of service
Ø Obsolesce
Ø Inflexibility of system
Ø Problems of proprietary
3. Loss Control
Loss control are those which reduce expected cost of losses by reducing the
frequency of losses and/or the severity losses that occur.
2. Loss financing
Loss financing are the methods used to funds to pay for or offset losses that occur.
It includes:
a. Retention
b. Insurance
c. Hedging
d. Other contractual risks transfers.
Losses of liability
Liability losses relate mainly to legal liability losses occur due to relationships
with many parties like suppliers, customers, employees, costs associated with liability
suits can impose substantial losses on firms.
(2) The identification of the operative cause or perils, coupled to the likely result.
Thank You
By: Dr. M P Singh
V.S Chopra