Risk Management Tools Research Articles

Expert systems: an effective tool for risk management – the case of Naftal Skikda

This study aims to investigate the impact of expert systems on improving risk management at Naftal Skikda, a key player in the oil and gas sector in Algeria. It seeks to determine the effectiveness of these advanced technologies in risk detection, real-time decision-making, and overall risk management efficiency. The hypotheses tested aim to assess whether the integration of expert systems can accelerate risk detection and contribute to risk reduction, while enhancing the speed and accuracy of decision-making. This research aims to provide strategic recommendations to strengthen practices for managing risks within the petroleum and natural gas sectors, highlighting the potential of expert systems as a transformative tool.

DIGITALIZATION AS A MEANS OF OVERCOMING CHALLENGES AND THREATS OF CONSTRUCTION PARTICIPANTS IN A MULTIPROJECT ENVIRONMENT

This article examines the potential of digitalization as a strategic solution to address the challenges and threats faced by construction actors in a multi-project environment.Construction activities are inherently complex, often characterized by the simultaneous management of several projects, each with its own characteristics and challenges. In a multi-project environment, participants such as designers, developers, and contractors face significant obstacles, including resource allocation conflicts, communication barriers, inefficiencies, and increased risk of delays and cost overruns. The advent of digital technology offers a transformative approach to these challenges, enabling more efficient management and coordination across multiple projects. The main objective of this paper is to explore how digital tools and technologies can mitigate the specific challenges faced by different actors during the construction of multiple projects. Analyzing key issues such as scheduling conflicts, miscommunication, data management complexity and risk management difficulties, the article highlights critical areas where digitization can have a significant impact.One of the most urgent problems in a multi-project environment is the effective allocation and planning of resources. Traditional management approaches often fail to cope with overlapping schedules and competing priorities, resulting in delays and inefficiencies. Digital tools such as Building Information Modeling (BIM) and Project Management Information Systems (PMIS) offer integrated platforms that facilitate seamless coordination and real-time updates. These systems provide centralized data stores and sophisticated scheduling algorithms that improve decision-making and reduce the likelihood of conflicts.Communication barriers are another major problem in multi-project environments that can lead to misunderstandings, errors, and delays that negatively impact project timelines and outcomes. Digital communication platforms, including instant messaging, video conferencing, and collaboration software, enhance real-time communication and ensure alignment among all stakeholders. These platforms enable the rapid exchange of critical information and facilitate the collaborative environment necessary to manage multiple projects simultaneously.Ensuring that all stakeholders have access to accurate and up-to-date information is critical to effective decision-making. Digitization solves this problem by providing advanced data management and analytics capabilities. Big data analytics and artificial intelligence can analyze large data sets to predict potential problems and optimize resource allocation. These technologies help identify trends, predict project outcomes, and facilitate informed decision-making, ultimately increasing project efficiency and effectiveness.Risk management is particularly challenging in a multi-project environment due to increased complexity and interdependence. Digital risk management tools offer a framework for identifying, assessing and mitigating risks across projects. These tools provide scenario analysis, risk tracking and automatic alerts, enabling proactive risk management and reducing the likelihood of project failure.

Legal regulation of risk hedging in financial markets using digital assets

This article is devoted to the consideration of issues related to the possibility of hedging risks using digital currencies and digital financial assets. The authors analyze the essence of hedging as one of the key factors of commercial activity, analyze its current legal regulation, identify financial risks that can be hedged, as well as the prospects for using digital assets as a risk management tool. The authors also determine some real cases of hedging transactions using digital assets.The authors believe that building a system of legal regulation in relation to hedging with digital assets should be aimed, first of all, at distinguishing hedging transactions and speculative high-risk transactions with financial instruments arising on the market.

The Impact of Risk Management on the Financial Performance of the General Insurance Companies in Bangladesh

Objective: Proper risk management abilities are the keys to financial success of any company. The purpose of this study is to explore the relationship between risk management activities and the financial performance of listed general insurance firms in Bangladesh. Methodology: To investigate the impact, secondary data have been collected from the annual reports of the 42 insurance firms listed in the DSE for a five-year period (2017–2021). ROA, the depended variable has been used as a proxy of the financial performance, while risk management performance of the firms was analyzed using credit risk, market risk, operational risk, liquidity risk, underwriting risk, solvency risk management capacity of the companies separately and aggregately. Findings: The regression result shows that solvency risk management has significant positive impact on financial performance while credit risk, operational risk and underwriting risk management activities also have positive impact on firm performance. In addition, while the risk management has been considered in a holistic approach considering all the risk management tools in aggregate, the regression analysis reveals that comprehensive risk management initiatives show significantly positive effect on firm performance of insurance firms. Practical Implications: This study underscores the need for effective risk management strategies within companies to boost their financial results. Originality: Very few papers in Bangladesh have explored this area in Bangladesh specially in insurance sector. Findings of this study in the context of Bangladesh contribute to the literature gap and help the management to take necessary initiatives to improve performance. Limitations: Selecting short time period for analysis and using ROA as the only dependent variable for performance measurement are the major limitations of this study.

MODERN CONCEPT OF OCCUPATIONAL SAFETY AND HEALTH MANAGEMENT WITH A RISK-BASED APPROACH

The article justifies implementing a risk-based approach (RBA) in occupational safety and health (OSH) management. It considers the limitations of traditional methods of implementing preventive measures focused on reactive measures designed to respond to immediate security challenges. It further proposes modern proactive strategies that can monitor, predict, and prevent dangerous situations in the workplace in advance. The study develops and substantiates the RBA’s main principles and underscores elements, methodologies, and their integration into existing OSH management systems. It provides arguments to support decentralising decision-making closer to the sources of hazards to allow for a faster and more effective response. It also emphasises the fragmented nature of the current occupational safety and health legislation, making it challenging to integrate RBA. Recommendations suggest improving the legislative framework to support RBA and provide employers greater flexibility in choosing risk management tools and methods. The authors recognise a systematic risk monitoring and assessment approach as a critical need. The absence of regular audits and risk assessments hinders the identification and prevention of hazards. The study proposes the introduction of modern technologies and methodologies, such as the Fine and Kinney method, the Elmeri system, and the Ishikawa diagram, to improve the risk identification and assessment processes. The article also stresses the importance of informing employees about potential risks and preventive measures, which contributes to the overall safety culture in organisations. In addition, the authors outline an algorithm for implementing RBA, which includes auditing workplaces, creating electronic registers, developing safety instructions, systematic risk assessment, documenting results, and informing stakeholders. The proposed approach aims to proactively identify and mitigate occupational risks, which helps to reduce workplace accidents and occupational diseases. The article concludes that the transition to a risk-based approach is essential for improving workplace safety, reducing occupational risks, and supporting the sustainable development of enterprises. By applying RBA, organisations can achieve higher occupational safety, reduce the costs associated with accidents and injuries, and contribute to a safer and healthier work environment. Keywords: risks, occupational safety, occupational health, production, risk-based approach.

استخدام تقنيات الذكاء الاصطناعي لتعزيز إدارة المخاطر في القطاع المصرفي بالمملكة العربية السعودية "بالتطبيق على مصرف الراجحي"

The research aimed to shed light on the impact of using artificial intelligence techniques to enhance risk management in the banking sector in the Kingdom of Saudi Arabia, with an application to Al Rajhi Bank, by clarifying the dimensions of artificial intelligence techniques, in addition to revealing the impact of artificial intelligence techniques in their dimensions on risk management. The researcher relied on the descriptive analytical approach in order to achieve the objectives of the study, as he used the questionnaire as a tool for collecting information, as this research was applied to a study community represented by employees and managers of Al Rajhi Bank, as the research sample consisted of a random sample of (196) individuals, and to analyze this information, the statistical analysis program (SPSS) was used. This research has reached a set of important results, the most prominent of which is that artificial intelligence technologies have an impact on risk management, and there is an influential role for each of the devices and software, effectiveness, knowledge and reasoning individually on risk management, and there is an influential role for artificial intelligence technologies on credit risks, market risks, and operational risks individually. The researcher recommended providing training programs for employees on the use of artificial intelligence tools in risk management, the necessity of investing in research and development of artificial intelligence applications in the banking field, and amending policies and procedures based on the results extracted from artificial intelligence applications.

A Binomial Tree-Based Empirical Study on the Biases of American Call Option

The application of financial derivatives, particularly options, has become pervasive in modern finance, offering effective tools for risk management. Among these, American options, allowing flexibility in exercising rights prior to expiration, dominate the derivatives market. Accurate pricing of American options is crucial for informed investment decisions and risk assessments. While various pricing models exist, the binomial tree model is welcomed for its simplicity and accessibility. However, inherent biases in pricing models raise questions about their efficacy across different sectors of the market. Based on the binomial tree model, this study empirically examines the pricing accuracy of American call options in both the technology sector and the industrial sector, by collecting data from top five largest companies in each sector. For the technology sector, samples are mainly from semiconductor manufacturers, software companies, etc., which are all situated in thriving fields; while those five companies from the industrial sector mainly belong to traditional industries, such as energy and engine suppliers. By analyzing prediction biases between two sectors, this research tries to give out reasons behind it and grasps a deeper understanding of option pricing nuances between sectors, and also the limitations of the binomial tree model.

Mitigating Immunogenicity by Coordinating Botulinum Toxin Treatments Between Aesthetics and Therapeutics.

Aesthetic use of botulinum toxin (BoNT) has expanded greatly beyond conventional low-dose (20 U) treatments, leading to some patients receiving doses previously reserved for therapeutic uses. The resulting risks are compounded in patients who receive BoNT for both aesthetic and therapeutic indications. Implementing tools for risk management is a high priority to prevent reduced treatment duration and effectiveness. To highlight the immunogenic risks of higher doses, with special attention to the compounding risks of resistance in patients with overlapping BoNT treatments from aesthetic and therapeutic indications. Authors examined the literature on current practices to provide a side-by-side comparison of BoNT doses for aesthetic and therapeutic indications. Aesthetic BoNT doses used in combination treatments of multiple areas or single treatments of large muscle areas can meet or exceed those observed in therapeutic treatments. Physicians have a responsibility to incorporate risk management and open dialog into their BoNT treatment plans to maximize effectiveness and longevity of treatments.

Conceptual framework for enhancing project management practices among women entrepreneurs in event management

This paper develops a conceptual framework to enhance project management practices among women entrepreneurs in event management. By addressing unique challenges such as balancing work-life responsibilities, overcoming gender biases, and accessing resources, the framework leverages strengths like creativity and communication skills. It includes practical strategies and tools for effective planning, resource management, stakeholder engagement, risk management, and continuous evaluation. The framework's application in real-world scenarios is discussed, providing actionable recommendations for women entrepreneurs. The paper also identifies future research directions, including empirical validation, case studies, technology integration, cross-cultural analysis, and longitudinal studies, to further refine and expand the framework.

Enhancing Sustainability through Weather Derivative Option Contracts: A Risk Management Tool in Greek Agriculture

This paper investigates the efficacy of weather derivatives as a risk management tool in the agricultural sector of Naousa, Greece, focusing on tree crops sensitive to temperature variations. The specific purpose is to assess how effectively weather derivative options can mitigate financial risks for farmers by providing strategic solutions. The study assesses the strategic application of Heating Degree Days (HDD) index options and their potential to alleviate economic vulnerabilities faced by farmers due to temperatures fluctuations. Employing different strike prices in Long Call and Straddle options strategies on the HDD index, the research offers tailored risk management solutions that cater to varying risk aversions among farmers. Moreover, the study applies the Value at Risk (VaR) methodology to quantify the financial security that weather derivatives can furnish, revealing a significantly reduced probability of severe financial losses in hedged scenarios compared to no-hedge conditions. Results show that all implemented strategies effectively enhance financial outcomes compared to scenarios without hedging, highlighting the exceptional utility of weather derivatives as risk management tools in the agricultural sector. Strategy 4, which exhibits the lowest VaR, emerges as the most effective, providing substantial protection against adverse weather conditions. This research supports the notion that weather derivatives can substantially contribute to the economic sustainability of rural economies, influencing policy decisions toward enhancing financial instruments for risk management in agriculture.

The Left-tail Risk and the Cross-section of Stock Returns: Evidence from China

As a matter of fact, left-tail risk is a common risk in stock market. This study examines the linear correlation considering Value-at-Risk (VaR) and future stock returns within context of the Chinese main board stocks, particularly during periods marked by significant left-tail risk. Processing data from March 2014 to March 2024, this study concentrate to daily and monthly cross-section returns, along with other financial statistics. A suitable Fama-Macbeth regression using in this paper to exam the significance of left-tail risk. The key focus is to investigate the effect of VaR concerning future stock returns under downside market conditions, as indicated by the recent 23% drop in China’s benchmark CSI 300 index. The regression analysis indicates a significant negative correlation between VaR and future stock returns, suggesting that higher potential losses as indicated by VaR correspond with lower future returns. This outcome is contrary to traditional asset pricing theories which posit a positive risk-return relationship. The findings will attract attention of investors to consider extreme risk management of public stocks and contributes to the ongoing discussion on risk assessment in financial markets by highlighting the importance of integrating robust risk management tools like VaR in investment strategies, especially in volatile markets.

Flood scenario spatio-temporal mapping via hydrological and hydrodynamic modelling and a remote sensing dataset: A case study of the Basento river (Southern Italy)

Today, hydrological and hydraulic modelling are essential tools for flood risk management, although these models are still affected by elements of uncertainty that needs to be reduced by optimizing their results. The present research aims to implement an operational mechanism on the Basento river basin in Southern Italy based on the cascading use of a physically based concentrated-parameter hydrological model for the estimation of flood hydrographs, and a two-dimensional hydraulic model for flood mapping. The calibration of the hydrological model uses physical information to reduce the initial range of the set parameter values, and an automated optimisation procedure based on a genetic algorithm to find optimal values of the model parameters by comparing simulated and observed data for the 2013 flood event. To calibrate the hydraulic model, a series of flood maps extracted from multi-temporal SAR images was used. In addition, validation of the hydrological and hydraulic models was carried out on March 2011 flood event. The results show the reliability of the models during both calibration and validation, with the hydrological model achieving a Nash-Sutcliffe Efficiency coefficient between 0.86 and 0.91, and the hydraulic model leading to results with an accuracy close to 70 %. Considering the significance of the results, the developed modelling chain was used to simulate future event scenarios for risk management assessment and could operate as an early warning system.

Development Trends of Insurance and Reinsurance Brokers in Georgia

Insurance is a very common and effective tool for managing financial risks. It also assumes the transfer of the risk in full or in part, but in this case the risk is transferred to the insurance company. Let's remember that insurance is one of the financial instruments of risk management, and not the only one. At the same time, it should be noted that insurance is a non-permanent instrument, and it cannot be used for all risks and in all risky situations. There are quite frequent cases when insurance is used together with other risk management tools, that is, it is part of the risk management program. Чачастую рашовые компании themselves require the client to reduce the existing primary risks with the help of physical instruments before signing the insurance contract. For example, in agriculture, it is completely unacceptable to manage risks there only by means of insurance. the first Keywords: insurance broker, insurance mediator, insurance product, sales channel, independent agent.

Optimal Investment Strategy for DC Pension Plan with Stochastic Salary and Value at Risk Constraint in Stochastic Volatility Model

This paper studies the optimal asset allocation problem of a defined contribution (DC) pension plan with a stochastic salary and value under a constraint within a stochastic volatility model. It is assumed that the financial market contains a risk-free asset and a risky asset whose price process satisfies the Stein–Stein stochastic volatility model. To comply with regulatory standards and offer a risk management tool, we integrate the dynamic versions of Value-at-Risk (VaR), Conditional Value-at-Risk (CVaR), and worst-case CVaR (wcCVaR) constraints into the DC pension fund management model. The salary is assumed to be stochastic and characterized by geometric Brownian motion. In the dynamic setting, a CVaR/wcCVaR constraint is equivalent to a VaR constraint under a higher confidence level. By using the Lagrange multiplier method and the dynamic programming method to maximize the constant absolute risk aversion (CARA) utility of terminal wealth, we obtain closed-form expressions of optimal investment strategies with and without a VaR constraint. Several numerical examples are provided to illustrate the impact of a dynamic VaR/CVaR/wcCVaR constraint and other parameters on the optimal strategy.

A NOVEL BIM-ENABLED SOFTWARE-BASED SOLUTION FOR MITIGATING CONSTRUCTION RISK MANAGEMENT

This paper presents a novel Software-based solution to mitigate the most prevalent construction risks with systematic implementation of Building Information Modeling Software at the lifecycle stages of the project and provides practical recommendations for industry practitioners. The construction industry has a complex and uncertain process presenting different opportunities and challenges at various project phases. Incorporating traditional risk management methods with BIM helps identify and manage risks effectively. This research paper presents a systematic approach to implementing BIM throughout the lifecycle of an eight-story building project, from feasibility to construction, to manage major risks in each phase. The paper addresses a gap in the literature by identifying and mitigating prominent risks in the construction industry of Pakistan through BIM modeling, based on a review of 180 common risks and detailed interviews. The research methodology involved surveys and data analysis to identify and prioritize the most significant risks and suitable BIM mitigation measures. The study suggests that BIM’s collaboration software resolves communication issues while Clash Detection mitigates Design-related risks before the start of construction. Simulation of Planned vs. Actual Progress and accurate Quantity Estimates achieved by BIM’s estimation software contribute to the successful completion of the project. BIM and its tools have the potential to revolutionize the construction process if used as a structured risk management tool throughout the project lifecycle. The paper advises designing out most project risks in the Planning and Design phase while reserving monitoring and control for later stages as early identification and management of risks is critical for success.

Applications of simulation modeling in mining project risk management: criteria, algorithm, evaluation

Project risk management in the mining industry is necessary to identify, analyze and reduce uncertainty. The engineering features of mining enterprises, by their nature, require improved risk management tools. This article proves the relevance of creating a simulation model of the production process to reduce uncertainty when making investment decisions. The purpose of the study is to develop an algorithm for deciding on the economic feasibility of creating a simulation experiment. At the same time, the features and patterns of the cases for which the simulation experiment was carried out were studied. Criteria for feasibility assessment of the model introduction based on a qualitative parameters became the central idea for algorithm. The relevance of the formulated algorithm was verified by creating a simulation model of a potassium salt deposit with subsequent optimization of the production process parameters. According to the results of the experiment, the damage from the occurrence of a risk situations was estimated as a decrease in conveyor productivity by 32.6%. The proposed methods made it possible to minimize this risk of stops in the conveyor network and assess the lack of income due to the risk occurrences.

Managing the risk of program failure: Propositional Evaluation as a tool for risk management

Public policy and programs fail for a range of reasons, some preventable and some much harder to treat. Program administrators require methods for managing risk. This article argues that evaluation can be a useful tool for identifying and managing risk. It offers Propositional Evaluation as a cost-effective, risk-based approach to the evaluation of any policy, program, initiative, or simply, plan of action for the public good. Propositional Evaluation treats programs as propositions for action and focuses on developing sound, that is, valid and well-grounded propositions. It begins in the design phase and continues through delivery to provide a means for identifying and managing risks to achieving intended outcomes. This article situates Propositional Evaluation approach in the evaluation theory literature. It reflects on common causes of program failure and identifies those evaluators may help program administrators identify and mitigate. It provides a description of five critical and five residual risks that derive from the propositional approach. Evaluating these risks provides a structure for evaluation and adaptive management. The intended audience is program administrators, and evaluators working to support them who require prospective evaluation and adaptive management or rapid and cost-effective evaluation for program design and re-design.

Aproximación geomecánica usando velocidades de onda y su relación con el parámetro “b”

In this research, an exhaustive and rigorous analysis about microseismicity and its importance for the analysis of geological structures will be presented, with special attention on the application of the GSI table and its relationship with safety. Microseismicity is the technique of detection and analysis of small seismic events that occur during the advance and mining exploitation, and its study is fundamental to guarantee a safe and efficient operation. The presence of these seismic events indicates the existence of stresses and deformations in the geological structures, which can have a significant impact on the safety of the operation. Therefore, microseismicity monitoring is an essential tool for geomechanical risk management. In this thesis the relationship between microseismicity and geological structures will be explored, using the GSI table as an important tool for the interpretation of microseismic data. The GSI table is a tool developed by the International Society for Rock Mechanics to assess the geomechanical stability of rock structures. In this work, the microseismic data will be analyzed and correlated with the GSI table, which will allow a better understanding of the geomechanical characteristics of the mine and a more accurate evaluation of geomechanical risk.

Analytically pricing European options in dynamic markets: Incorporating liquidity variations and economic cycles

This paper discusses the European option pricing problem in the context of asset prices being influenced by liquidity risks and economic cycles. We employ regime switching for asset volatility, and liquidity risks are captured by market-wide liquidity. We obtain an analytical formulation of European option prices, allowing for fast model calibration using real-market data. By estimating model parameters using real option data, we show that pricing errors can be significantly reduced using our model that considers stochastic liquidity, indicating that our model has real-world applications. Our results can help investors and regulators better understand the market and provide a potentially effective risk management tool.

Tropical Cyclone Storm Surge‐Based Flood Risk Assessment Under Combined Scenarios of High Tides and Sea‐Level Rise: A Case Study of Hainan Island, China

AbstractIn the context of climate change, coastal flood risk is intensifying globally, particularly in China, where intricate coastlines and frequent tropical cyclones make storm surges a major concern. Despite local government's efforts to initiate coastal monitoring networks and qualitative risk guidelines, there remains a gap in detailed and efficient quantitative assessments for combinations of multiple sea‐level components. To address this, we develop the Tropical Cyclone Storm Surge‐based Flood Risk Assessment under Combined Scenarios (TCSoS‐FRACS). This framework integrates impacts of storm surges, high tides, and sea‐level rise using a hybrid of statistical and dynamic models to balance reliability and efficiency. By combining hazard, exposure, and vulnerability, it incorporates economic and demographic factors for a deeper understanding of risk composition. Applying TCSoS‐FRACS to Hainan Island reveals that the combined effects of storm surges, high tides, and sea‐level rise significantly amplify local coastal flood risk, increasing economic losses to 4.27–5.90 times and affected populations to 4.96–6.23 times. Additionally, transitioning from Fossil‐fueled Development (SSP5‐8.5) to Sustainability (SSP1‐1.9) can reduce the risk increase by approximately half. The equivalence in flood hazard between current high tides and future sea level under a sustainable scenario boosts confidence in climate change adaptation efforts. However, coastal cities with low hazard but high exposure need heightened vigilance in flood defense, as future risk could escalate sharply. Our study provides new insights into coastal flood risk on Hainan Island and other regions with similar profiles, offering a transferable and efficient tool for disaster risk management and aiding in regional sustainable development.