| The term 'risk management' was probably first used | | | | activities were primarily related to more effective |
| in the United States in the early 1950s. It developed | | | | Commercial Insurance buying linked with the |
| out of the dissatisfaction of US Commercial Insurance | | | | introduction of much greater self-insurance, in the |
| managers with the lack of premium credit they were | | | | form of deductibles and the establishment of captive |
| being given by the insurance industry for the | | | | insurance companies. |
| loss-prevention methods that were being introduced | | | | This meant that there was a tendency for risk |
| for property risks and the desire to retain more risk | | | | management to become part of the business |
| within large US corporations. | | | | insurance function. As the insurance-buying portion of |
| In parallel with this activity, the universities in the | | | | the insurance manager's job reduced and he became |
| United States extended their insurance curricula to | | | | more active in managing self-insurance programmes |
| include risk and especially mathematical and statistical | | | | and loss control budgets, the term 'risk manager' |
| methods of calculating loss probabilities. The | | | | became more common and today is used by the |
| development for many years was slow, but gradually | | | | majority of those who would have been called |
| the concepts of risk analysis, loss prevention and | | | | 'insurance manager' in previous years. |
| self-insurance spread throughout North America and | | | | The approach to risk management in the United |
| through multinational company activity in Europe. | | | | States has until recent times been somewhat |
| More sophisticated methods were introduced to | | | | dogmatic in that the risk manager has been regarded |
| calculate maximum possible losses (MPL) and | | | | as the man who manages pure or static risk within |
| estimated maximum losses (EML), and increasing | | | | the company. In Europe the approach has always |
| expenditure was devoted to sophisticated fire | | | | been that the risk manager acts in an advisory |
| protection systems and the use of highly protected | | | | capacity to line management and coordinates |
| risk (HPR) standards for new properties. These | | | | insurance and risk management activity. |