November 26, 2014

ASSIGNMENT IN
FIN203-A

Submitted to:
Mr. Edwin F. Pamaran

Submitted by:
Dimaguila, Ernesto Dennis

Finance Sector:

Market risk- refers to the possibility of incurring large losses from adverse

changes in financial asset prices, such as stock prices or interest rates.

Credit risk- is the risk that a firms borrowers will not repay their debt obligations

in full when they are due.

Funding (or liquidity) risk- is the risk that a firm cannot obtain the funds
necessary to meet its financial obligations, for example short-term loan
commitments.
Operational risk- is the risk of monetary loss resulting from inadequate or failed

internal processes, people, and systems or from external events

Insurance Sector:

For life insurance companies- technical provisions typically are the greater
part of their liabilities and they reflect the amount set aside to pay potential
claims on the policies underwritten by the firms; capital is a relatively small
percentage. Thus, the dominant risk arising from life insurance activities is
whether their technical provisions are adequate, as measured using actuarial
techniques. While term-life insurance policies are based solely on providing
death benefits, whole-life insurance policies typically permit their holders to
invest in specific assets and even to borrow against the value of the policies.
Hence, life insurance companies also face market and credit risks.

For a non-life insurance company- The different balance between provisions

and capital for non-life insurance companies reflects the greater uncertainty of
non-life claims. The need for an additional buffer for risk over and above
provisions accounts for the larger relative share of capital in non-life insurance
companies balance sheets.

Regarding funding risk, insurance activities are different from other financial
activities because they are prefunded by premiums; for this reason, insurance
companies do not rely heavily on short-term market funding

Health Care Sector:

Patient safety is the prevention of avoidable errors and adverse effects

to patients associated with health care.

Quality Assurance - Activities and programs intended to assure or improve the
quality of care in either a defined medical setting or a program. Includes the
assessment or evaluation of the quality of care; identification of problems or
shortcomings in the delivery of care; designing activities to overcome these

deficiencies; and follow-up monitoring to ensure effectiveness of corrective steps.

Patients Rights- insure that patients are treated accordingly and in respect of
their rights.

Government Sector:

Strategic risk: the concern that major strategic alternatives may be ill-advised

given the organisations internal and external circumstances;

Environmental risk: covering macro-environmental factors, competitive factors

and market factors.

Operational risk: covering compliance risk and process risk.

Sources:
http://www.anao.gov.au/~/media/Uploads/Documents/risk_and_risk_management_in_th
e_public_sector.pdf
http://www.ehow.com/about_6619711_definition-risk-management-health-care.html
http://www.ncbi.nlm.nih.gov/mesh/68011785
http://www.frbsf.org/economic-research/publications/economic-letter/2003/february/howfinancial-firms-manage-risk/#subhead1