Which aspect of risk management is related to identifying potential losses?

The aspect of risk management that focuses on identifying potential losses is risk assessment. This process involves systematically evaluating risks to understand their nature and potential impact on an organization or individual. Risk assessment encompasses identifying hazards, analyzing the risks associated with them, and determining how they can affect operations or objectives.

By recognizing potential losses, businesses can develop strategies to manage, mitigate, or transfer those risks effectively. Risk assessment serves as a foundational step in the overall risk management process, guiding decisions on how to handle identified risks appropriately. In contrast, other concepts such as risk retention, risk transfer, and risk diversification involve strategies to handle or minimize risks after they have been assessed.