A Brief History of Risk Management

The practice of risk management is concerned with future-proofing your business in the event of crises and sudden changes in the environment of your industry. With ideas that put emphasis on the future, it is still important to look at them when they were in the past as well. Risk management is practiced every day unknowingly at times. From day-to-day personal activities to large complex business solutions, let's look at a brief history of risk management. 

When Did Risk Management Start?  

The inception of risk management dates way back to ancient civilizations due to the idea of gaming and gambling. Civilizations used to pass the time thousands of years ago by playing different wagering games that emulate games like chess and checkers today. These forms of games lead to the rise and idea of probability theory, a great pillar of risk management. Early mathematicians analyzed games with the intent of developing mathematical theories that could be applied to the real world. 

Alongside early gaming and mathematical theory, different forms of basic insurance companies can be seen operating in ancient times. In Ancient Rome, mutual aid and burial aid documents were uncovered and could be traced to early forms of insurance companies. A lot of these companies provided resources to companies in exchange for a return on resources later on or what would be considered interest today. 

When Did Risk Management Become A Full-Time Job?  

Careers in risk management started to sprout up before risk management was even a title. Life insurance companies could be seen as early as the 1700s in England which showed the first-ever full-time companies dedicated to risk management since ancient societies were more just a series of odd jobs and favors. Throughout history, people were in place to help manage businesses, countries, and military assets through minimizing risk with the tools that were available. After WWII, risk management became a more popular term with alternative forms of risk management developing rather than just pumping money into insurance. Insurance became way too expensive to be the only form of risk management. 

The Future of Risk Management

Sophisticated risk management technology has been developed for a couple decades now leading us to where risk management is today. The more insight risk management professionals can have on the future, the better risk management practices become. These state-of-the-art software tools allow for better monitoring, integration, and planning. 

I hope this helps!