Risk Management

Introduction

Camden Property Trust is a real estate investment trust engaged in the ownership, management, development, acquisition, and construction of multifamily apartment communities. Camden Property Trust properties consist of mid-rise buildings or two and three story buildings in a landscaped setting and provide residents with a variety of amenities, such as swimming pools, clubhouse, whirlpool spas, weight room facilities, and controlled-access gates. As of Dec 31 2010, Camden Property Trust owned interests in, operated, or was developing 188 multifamily properties comprising 63,923 apartment homes across the U.S. In addition, company owned other land parcels.

Discussion

Perceived Risks

The perceived risks to the Camden Property Trust include the following;

- Pure risk that include damage to assets, legal ability and work injury.

- Price risk that includes exchange rate risk and interest rate risk.

Managing Risks

It is important and crucial for the Camden Property Trust to manage risk. Therefore, the Camden Property Trust Camden Property Trust should adopt the strategy of loss control for managing the risk to the company. This includes reduced level of risky activity and increased precautions. Risk management is the systematic collection and assessment of risks and the control of reactions to perceived risks. It is a systematic procedure used in many application areas, for example, corporate risks, credit risks, financial system risks, environmental risks, underwriting risks and technical risks (James, 12-96). Risks are a part of every business and every business must be able to cope up with the associated risks. In this regard, small and medium sized enterprises in the United States, there are considerable number of risks which can be hazardous for small businesses if they are not paid attention to. Therefore, it is of immense importance to develop strategies to manage the potential risks so that any untoward situation can be dealt with smoothly without any hassles. There has been a shortage of research on the present situation of risk management in Camden Property Trust. Thus, there was a need for research to be carried out on the said topic to address the issue of risk management. The operational risk which is associated is with Camden Property Trust are the risk of direct or indirect losses caused by errors or imperfections in the processes and systems in Camden Property Trust, human error or lack of qualified personnel in the organization or unfavorable external events of non-financial nature, such as fraud.

It is also important that the Camden Property Trust should also focus on loss financing; for this Camden Property Trust should go for the insurance and other contractual risk transfers. The economic essence of insurance is to provide insurance protection. Insurance coverage can be explained as a bilateral response of mankind to the possible dangers of natural, technological, economic, social, environmental and other causes. On the one hand, the insurance coverage is called the objective need of individuals and entities in the preservation of their property interests associated with different aspects of life. On the other hand, this need is accompanied by the relevant people's ability to ensure these ...