Risk management service is to assess and quantify the likelihood of financial impact of events occurring in the customer’s world that require settlement by the insurer and the ability to spread the risk of these events. The work of risk management involves application of mathematical and statistical modelling in order to determine the apt premium cover and the value of insurance risk. What is meant by risk management services? Risk management means providing any kind of insurance risk management services by the insurance broker to its clients. These services include services like risk advisory, risk assessment, risk minimization or risk mitigation for the benefit of its clients. What are Risk Management Services? Regulation 27 of the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018 (regulations) provides for different risk management services. An insurance broker can charge a fee from the client for the services rendered by it to the client for risk management services or other similar services as per the functions defined under the regulations.The insurance broker can extend these services only for the commercial risks based on the written confirmation from the client for those fees.The insurance brokers are not allowed to receive both remuneration and the reward mentioned under the IRDAI (Payment of commission or remuneration or reward to insurance agents and insurance intermediaries) Regulations, 2016 and the fees for providing risk management services given under Regulation 2(1)(q).It is the responsibility of the insurance broker to obtain a written mandate from the client to offer these services. There is a duty on the part of insurance broker to maintain records of the these services offered to the client. These details include name of the client, place of risk, amount of fees charged, the basis of fees charged, nature and the type of risk management services undertaken etc.The insurance broker can also charge fee for any other similar services which has been mutually decided between the client and the insurance broker.There is a possibility that an insurance broker may not have the requisite skills and resources. In such cases an insurance broker can take help from the services rendered by the experts or specialists for undertaking the risk management or providing similar services.If an insurance broker engages external specialists for providing these services, then it is the duty of the insurance broker to apprise the client about it. Another duty on part of the insurance broker is to maintain a record of these services or other such similar services offered to the client. These details include name of the expert, services rendered by the client, amount of fees paid, basis of the fee paid etc.Ultimately, the insurance broker will be held liable for all the acts of the external experts for undertaking risk management services. What are the kinds of services offered within risk management services Analysis of risk, Audit and Review of services An important risk management service includes risk inspection, valuation and reviewing of policy documents, suggesting improvements in relation to the business profile, operational aspects of the client’s business profile, operational aspects of client’s business and client’s claim history. Periodic interactions are done which helps service provider to understand any new development s that are taking place which require insurance coverage. For example whether the sum insured required enhancement or any inclusion of a new entity is required etc. Service of broking and placement One of the such services is helping a client in short listing of insurers and comparing the quote received from them. A rigorous exercise of negotiation and evaluation of the most value based coverage, the service provider helps the client in finalising the insurers. It is ensured that the policy has correct terms and conditions and whether requisite support is provided to enable hassle free claims. Advisory regarding Lender’s insurance Usually large projects have a major debt component. This forces the lenders to ensure that the project company has taken all the reasonable measures to protect the project’s income stream as well as capital assets. These measures include a comprehensive insurance programme which is not only prudent but economically feasible as well. In such situations, risk management services include reviewing and analysing the risks associated with the project and the borrowers’ insurance programme to determine if it meets the lender’s requirements or not. Conclusion Management of risk in today’s time is very difficult especially when the nature of risks have transformed to include global risks such as pandemic, cyber attacks, supply chain disruptions which can affect customers, suppliers and also the economies. But such risks are harder to identify, predict and manage. It is imperative that the risk management services address end-to-end lifecycle from indemnification, assessment, mitigation, loss recovery etc. it also requires helping to build resilience.