Algorithm of financial management by risks

Marketing of financial instruments risk management includes an algorithm of the choice of such tools for the solution of problems of ensuring uninterrupted operation of the reproduction process realized by it or its part.

To choose one of alternative tools and options of actions it is possible to consider the following algorithm of financial management by risks:

• to formulate the purpose of actions;
• to synthesize criterion - the rule of the choice of the best option of actions from a row possible;
• to carry out the analysis of the external environment in which operation is performed or the system for allocation of possible sources of risk works;
• to carry out the analysis of the developed transaction or a system for the purpose of allocation of possible sources of risk;
• to carry out the analysis of the external environment in which operation is performed or the system for the purpose of allocation of the objects vulnerable in relation to the striking factors which can arise at realization of sources of risk works;
• to estimate the frequency of emergence of a source of risk for separate elements of a system and (or) transaction;
• to develop the forecast - to estimate the probability of an insured event and average possible damage at each of insured events;
• to evaluate finance costs on warning (to exclude sales opportunity or to reduce probability) sales opportunity of risk;
• using criterion, to carry out rational distribution and (or) to optimize distribution of financial resources between actions:
  - on elimination of a source of risk;
  - on risk reduction by means of reduction of intensity of the striking factors or vulnerability of objects which can be affected by the striking factors;
  - on compensation for damage (consequences) of risk.
• to estimate the level of security and sufficiency of the taken measures. And if insufficiency of measures for prevention and risk reduction is recognized, then to evaluate the located residual financial resources which can be directed to insurance;
• if insurance appears more expedient, then in the beginning it is necessary to evaluate a possibility of use in the conditions of concrete transaction of not share insurance;
• if it is impossible to use not share insurance, then it is necessary to estimate the rational price of insurance service;
• to choose the insurer.