Risk Management In Medium Sized Commercial Buildings

Project and Seminar Material for Building Technology BT

Risk Management In Medium Sized Commercial Buildings


Abstract


The main purpose and focus of this study was to investigate and bring to limelight the roles of insurance company in management of risk in medium scale organization. The researcher used Usmer water ventures located at No. 2 Hospital Lane Uyo, Akwa Ibom State for her study. In order to achieve the objectives of the study, seven (7) research questions and five (5) hypothesis were formulated to give a proper guide to the study, literatures that were related to the variables of the topic under study were reviewed stated according to the hypothesis for the study. The researcher underwent descriptive research as she conducts the study. The sample size of the study was taken from the original samples of the population which was 28. As veritable tools for data collection, questionnaire, observation and interview were used for data collection. Chi-square analysis was used to test the hypothesis and arrived at reasonable conclusion and solution. Based on the findings of this study, it was recommended that management of business organization should not overlook the insurance of their business because that is the only way risk and uncertainties can be managed and controlled.


Chapter One


Introduction

1.1 Background of the Study

Every purposeful and responsible enterprise quest is to improve and succeed in its prospection objective and for any business establishment to venture into achieving her goals and objectives must first and foremost take precautions in other to even though not to totally eradicate dangers and uncertainties that may subsequently come up will go a long way to limit it and its effects. It is at this point that a risk manager comes in to bring in ways in which risk could be managed in order to efficiently run and to achieve the organizational goals and objectives.

As we are in a business society one of the important thing most managers should have at the back of their mind is that there is no business enterprise that is free of risk, it certainly face some degree of risk, and some of the risk are controllable with respect to the appropriate taken against it whereas some are largely unpredictable. Before looking at the meaning of “risk management” it will be important to briefly examine the concept of risks. ISO 3100- International Organization for Standardization (2009) defined and summarized risk as the probability and/or impact of unfortunate events or the likelihood of loss. It went further to say that risks can be found anywhere from financial markets, project natural causes, securities, industrial processes, health, science experiments and so forth, therefore, risk ought to be managed in order to minimize the realization of unwanted opportunities.

Risk management is defined as a systematic process of identifying and assessing organization risks and taking actions to protect the firm against them (Encyclopedia of management) ISO 3100 (2009), want ahead to defined risk management as the identification, assessment and prioritization of risk followed by coordinated and economical application of resources to minimize, monitor and control the probability and/or impact of unfortunate event or to maximize the realization of opportunities. Risk management is a functional management process or transfer mechanism of identification, evaluation earnings of a business or other enterprise with minimum cost and maximum efficiency.

In a paper presented by “Insurance Training Centre” Ogere Ogun state dated April, 1987 titled “scope of risk management extend beyond mere handling of insurance risk, it does encompasses, the management of all types of risk. Risk management is concerned with formulating some forms of defensive strategy, which takes account of organizational assets and objectives. This price of work will initially examined the various mechanism employed by Anchor Insurance company in the Assessment of risk. These include:

  • Process of identification
  • Evaluation
  • Monitoring and controlling of such risk

– The Identification of risk will include information on the proposal which reveals the physical and morale hazards of the subject matter of insurance.

– The evaluation of risk views placement of value on the identified risks, which threatens a corporate assets. The monitoring and control of risk highlights the physical and financial control of risk that threatens assets.

The centre piece of this work will be to thoroughly analyze various means of identifying corporate objectives. These will include retention, reduction and transfer of risk. Also, taking steps pre-loss and post loss objectives and the procedure for transfer and reduction of loss. The entire work of this piece will be comprehensively packaged by ascertaining various hazards and inherent liabilities present at the risk and make recommendations based on experts opinion to enable underwriter to decide whether the risk offered is acceptable at standard rate or otherwise. Finally, this work will also suggest ways and means for prudent risk management is respect with those risks that corporate bodies like Anchor Insurance Company as an entity is faced with and bring about reduction to loss exposure.


1.2 Statement of the Problem

The major problem of this research work is centered on how to reduce risk in Usmer Water which will in turn enhance its development and also aids its management in successfully achieve their prospective objectives. Furthermore, the research work has communication shows as one of the most important aspect of the challenge. This is because it has to do with management as an efficient means of achieving corporate objectives of small and medium scale business and also the quest to achieving objective and maximizing risk is its most vocal point.

In addition to these challenges and constrains, lack of technical know-how could be said to be another major problems confronting Usmer Water. As an efficient means of achieving corporate objectives does not easily manifest or come to lime light because basic insurance information sometimes does not reach most managers due to their lack of enterprise, and most managers due to their lack of expertise fail to go into research to source for information that will effectively aid the organization in taking a cover against these risk and uncertainties that might come up and pronounce the challenge faced in risk management in Usmer water and also the challenges of insurance practitioners (risk managers) in making Usmer water a better and improved company by providing ways and means of curbing risks in mentioned enterprise so as to improve its development and growth.


1.3 objectives of the Study

  1. To find out if there is risk management in Usmer Water.
  2. To find out the challenges Usmer Water faced in risk management
  3. To examine the contribution of insurance company in managing of risk in Usmer Water.
  4. To find out the insurance plan in regards to Usmer Water
  5. To ascertained if there is any damage as a result of lack of risk management.

1.4 Research Questions

For the purpose of this study, the following research questions have been proposed by the researcher.

  1. Is there insurance management in Usmer Water?
  2. What are the challenges faced in risk management in Usmer Water?
  3. What are the contributions of this insurance company since the registration of Usmer Water Company?
  4. What are the insurance plans like in Usmer Water?

1.5 Research Hypotheses

  1. Ho: There is no significant relationship between risk management and Usmer Water.
  2. Ho: There is no significant relationship between risk challenges and Usmer Water.
  3. Ho: There is no contribution between insurance company and Usmer Water.
  4. Ho: There is no significant insurance policy and Usmer Water
  5. Ho: There is no significant damages in Usmer Water and failures in risk management.

1.6 Significance of the Study

If this project was not intelligible enough it could not have been approved, the project supervisor and the researcher believed that some people will benefit from this project topic when it is properly done. Having know the important role the insurance company play in management of risk in most medium scale businesses, this study is therefore meant to show that is inevitable for a business organization to function without a back-up or support in case something gets wrong in the long run.

However, the important of this research to management of any organization both profit and non-profit organizations, students both graduate and undergraduate will not be over emphasized. Generally, everybody, all business enterprise that want to survive in these ever dynamic business world must learn to plan and associate themselves with insurance company for it serves as a platform of support which they will fall back to in case any risk comes up later in the future.


1.7 Scope of the Study

The area of this study was limited to Usmer Water in no. 2 Hospital Lane, Uyo, Akwa Ibom State. The reason this case study was chosen because of its proximity and nearness to the capital city of Uyo which is populated with so many good business and well distribution outlets. Another reason for limiting the study to Uyo was to meet up with time and also to reduce the financial constraints.


1.8 Limitation of the Study

During the time of this research work, there were many impediments I encountered, and such impediments are:

1. Time:

This is a major factor I encountered as I was going through this work. There were many responsibilities I had to take care of, such as my class assignment, attending classes, taking test and especially in the areas of data collection and other relevant information which would aid me in writing this project so there was limited.

2. Finance:

Inadequate finance has always been a problem to any student especially those who are sponsoring themselves. These research work would have been ready in time had it been I had enough money to acquire all the necessary data needed to complete this research work.


1.9 Definition of Terms

In this area of the research work, certain key words are summarized.

1. Risk:

A situation of uncertainty as to the outcome of an event.

2. Risk Management:

The process involving identification measurement and economic control of risk that threatens the assets and profits of a business enterprise.

3. Insurance:

A legal way of protecting your properties, life etc, against loss or harm arising unexpectedly in consideration of a payment proportionate to the risk involved.

4. Enterprise:

A business entity or organization

5. Hazard:

A physical or mortal features that cause damages.

6. Survey:

An inspection of premises or property proposed for insurance.

7. Objectives:

A goal one has set to achieve in future.

8. Management:

The act of running and controlling the affairs of business.

9. Evaluation:

The act of forming an opinion of the amount, value or quality of something after thinking about it careful


Chapter Five


Summary, Conclusion and Recommendations

5.1 Brief Introduction

This study was as an assessment of the roles of insurance company in management of risk in medium scale organization. This chapter is devoted to the summary, conclusion and recommendation of the entire project work.


5.2 Summary of the Study

From the foregoing, it is recognized that every organization concern has a set goals and objectives. On a similar token, it is appreciated that each of these organization is beset by fortuitous events which eventually would prejudice the attainment of the set goals. Since these events could be handled in a very critical manner so as to ensure the organizational so as to ensure the organizational set target. It is of paramount important for every organization to either go into contract with insurance company and also set up a risk manager who would act as an adviser on issues relating to risk.

Prudent risk management will lead to reduction if not total eradication of those perils of losses to the insured. To the underwriters or corporate body, the loss prevention techniques adopted will also reduce the frequency and severity of claims from the insured. The duty of risk manager is performed by the reinsurance personnel who analyzed their risk portfolio and organize necessary reinsurance cover as a form of handling measures.


5.3 Conclusion

According to the test hypothesis and objectives of the study we draw on,** conclusion from each of the test; therefore, there is a significance relationship between risk management and Usmer Water Ventures, there is a significance relationship between risk challenges and risk management in Usmer Water Ventures, there is a significant relationship between insurance policy and Usmer water venture, there is a significance relationship between insurance plan and Usmer water ventures and there is a significance relationship between damages in Usmer Water Ventures and risk management.


5.4 Recommendations

  1. Insurance industries need to avoid geographical concentration and accumulation of risk in an area. The more geographically concentrated the portfolio, the greater the total portfolio exposed to a natural disaster or catastrophe. Insurance companies need to keep an accurate statistical data as regards claims experience in technological development of perils in order to change equitable premium consummate to the risk exposures.
  2. Effective survey or risk management on proposed and assumed risk, will ameliorate large claim, cost, and underwriting looses to the insurer, the effect of loss in the insured and nation.
  3. Risk management department should also be established to be manned by a competent professionally qualified risk manager. His functions should include analyzing, managing, monitoring, and making recommendations for positive risk prevention techniques with a view to minimizing losses.
  4. The insurance industries should intensify further efforts by creating a research development which will help to supervise or monitor the information on which decisions are taken, so as to help reduce risk. An insurer that is for instance, considering marketing a new product may seek to reduce the uncertainty, by first conducting what is called a detailed market research.
  5. Finally, it is an undisputable fact that prudent and effective risk management will lead to decrease in claims experiences to the insurer, which invariably will help many corporate bodies in accomplishing set overall objectives.

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