Dr. Michael Haerig, Marsh GmbH, MIP Power, Duesseldorf, Germany

Terms as Basle II, Rating, Risk Management present for medium and small-scale enterprises a challenge and a barrier which can lead to the breakdown of these companies. Without a good rating performance it is nearly impossible to obtain a credit with good conditions and it is quite possible that credits are not allowed or frozen. Coverage of business risks influences strongly the rating, because it means security for the bank loans.

Marsh is the world’s leading risk and insurance services firm and provides advice and transactional capabilities to clients in over 100 countries. A specialized branch team working in the power and utility business has taken an active role in the risk and insurance management of renewable energies from the beginning.

This lecture will point out risk and risk management. An insurance program developed particularly for photovoltaic systems is introduced.

Definition of Risk and Risk Management

The term risk is linked to several ideas like Uncertainty about what and when, Uncertainty about impact, undesirable consequences and other. A pure risk presents the possibility of a loss, but not a profit. A speculative risk may produce a profit or a loss. Like the term chance is risk doubt about a future outcome. In one case the outcome is more favorable than in the other case.

Taking this into consideration, risk can be best described using objectives what is also according to several International Standards.

"Risk is the chance of something happening which will have an impact on objectives” or another definition coming from business:

"Factors, events or circumstances relevant to the organization’s activities that may prevent or detract from the achievement of its aims, including failure to maximize opportunities”.

Figure 1 shows the Risk Management Process which consists of identification, analysis and economic control of those risks which threaten assets or earning capability.