Risk Management Strategies and Higher Education Insurance
Members of higher learning institutes must first agree on a common definition of risk that is clearly understood throughout the college or university by the board, management, and staff, in order to effectively manage any existing risks and this includes securing proper amounts of higher education insurance. The practice of risk management is also essential to any organization that is responsible for the safety and well being of its staff and students, along with workers, visitors and others visiting their establishments.
The purpose is to educate and also track risk management trends, something that is done regularly by the Association of College and University Auditors (ACUA) and the Public Risk Management Association (PRIMA), which has recognized that the transformation of risk management includes organizational vision, mission and strategies, as well as being informed about the most recent changes in risk management.
How risk management practices have evolved and expanded
Risk management practices evolved from insurance purchases when universities (as well as businesses) decided to invest in methods to treat risk exposures. Originally the scope of risk management was narrowly defined to include only accidents that resulted in a loss, but in the 1980s, as sophisticated risk financing became an important alternative to insurance, risk management expanded to include other risk transfer and risk control strategies.
Traditional risk management practices expanded into strategic risk management, which is an even more comprehensive approach that includes investment, business, and political risk considerations. Higher-education leaders, anxious to develop business strategies for the 21st century are recognizing, and continuously examining, the market forces that are changing the entire economy, as well as related business environments that envelop our complex higher education institutions.
There are many developments that are increasing the pressure for higher learning institutions to develop effective risk management policies:
- Powerful new technologies requiring significant investment of both financial and human capital resources
- Fierce competition for faculty, students, staff, and financial resources
- The need for increased productivity, responsiveness, and accountability
- Increased external scrutiny from government, the public, and governing boards
- Rapidly increasing entrepreneurial ventures, and
- Increased levels of litigation, in general and internally
As higher education leaders map new strategies to deal with the stresses and strains on traditional administrative and financial infrastructures they need both, a sound risk management plan and higher education insurance tailored to the particular needs of their students and personnel.