Which term describes an organized effort to assess potential financial losses?

The term that describes an organized effort to assess potential financial losses is risk management. This practice involves identifying, evaluating, and prioritizing risks followed by the coordinated application of resources to minimize, monitor, and control the probability or impact of unforeseen events. Risk management is essential in various industries, particularly in insurance, where the focus is on understanding and mitigating financial loss from risks.

Loss assessment, while related, specifically refers to the evaluation of the extent of damage and loss after an event has occurred, rather than the proactive measures taken to prevent those losses. Underwriting is the process of evaluating the risk of insuring a home, car, or individual to determine policy terms and premiums, but it does not encompass the broader assessment of potential financial losses. Claims evaluation pertains to the process of reviewing and assessing claims made by insured parties, which occurs after a loss has happened rather than before.

Overall, risk management is the most comprehensive term that encompasses the organized efforts to identify and address potential financial losses.