What is risk characteristic in SAP (FS-PM - Policy Management)?

SAP Term: risk characteristic

• Component: FS-PM

• Component Name: Policy Management

• Description: Characteristic that describes an insured object in a product-specific manner, in addition to the object characteristics. It is determined by the "Insured Object" product module, on a product-specific basis.

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• Key Concepts: 
  Risk characteristics are used in the FS-PM Policy Management component of SAP to define the risk profile of a customer or business partner. Risk characteristics are used to determine the risk level of a customer or business partner and can be used to set up different policies for different risk levels. 
  
  How to use it: 
  Risk characteristics can be used to set up different policies for different risk levels. For example, a customer with a high risk profile may be subject to more stringent policies than a customer with a low risk profile. Risk characteristics can also be used to determine the level of credit that should be extended to a customer or business partner. 
  
  Tips & Tricks: 
  When setting up risk characteristics, it is important to consider the potential impact of each characteristic on the overall risk profile. For example, if a customer has a high credit score but has a history of late payments, this could indicate that they are at higher risk than someone with a lower credit score but no history of late payments. 
  
  Related Information: 
  For more information on setting up and using risk characteristics in FS-PM Policy Management, please refer to the SAP Help documentation.