Risk management in insurance

Abstract

This paper outlines the aspects of risk management that are applicable to insuring and insurance broking operations. Insurance is a risk‐accepting, rather than risk‐averse activity; thus its own risk management has to concentrate on the proper appreciation of changing patterns of risk in an economically developing world of changing climate and on the dangers inherent in the aggregation of risks in globalised businesses. Simplified ‘commodity’ insurance products may be mis‐sold by inept or unethical agents or staff, with a disastrous effect on profit and/or corporate reputation. However large concentrations of capital in insuring organisations may become, and however fully global the major broking houses become, in the end the basic insurance principle of good faith and the recognition of moral hazard will determine the success of well‐managed (and risk managed) insurance business structures.

Citation

Bland, D.E. (1999), "Risk management in insurance", Journal of Financial Regulation and Compliance, Vol. 7 No. 1, pp. 13-16. https://doi.org/10.1108/eb024991