Risk Management
Risk Management
Introduction
Risk Management
Financial Economics of Insurance
Underwriting Risks: Life Risk and Non-life Risk
Investment Risks: Market, Credit and Liquidity Risk
Non-financial Risks: Operational and Business Risk
The Financial Crisis: Consequences for Insurers
Insurance Supervision: From Solvency I to Solvency II
Insurance Supervision Outside the EU
Pillar I of Solvency II
Pillar II of Solvency II
Pillar III of Solvency II
Accounting Regulations
Banking Supervision: From Basel I to III
Management Control
Organising Risk Management
Bringing All the Strands Together
This chapter describes the fundamentals of this book: what is risk management? We will start by looking at the history of risk, as this will help us achieve a good understanding to discuss the applications in insurance throughout the book. We will then discuss the main frameworks that are used by risk management practitioners across the globe. We will end this chapter by discussing the commonly used risk taxonomy. This taxonomy is also the basis for Solvency II.
WHAT IS RISK?
This is a fundamental question, and the longer we discuss it, the less likely we are to arrive at one conclusive answer. Therefore, we will focus on the way risk is defined in the context of risk management in financial institutions such as insurers and banks. In this context, risk is the deviation of an outcome from its expectation, causing a loss or decrease in value.
Later in this chapter, we will dig into some more aspects of risk, and return to the above definition.
A SHORT HISTORY OF RISK
Although risks have been present at all times during the history of mankind, the explicit attention on them has differed over time. In earlier civilisations, many unexpected events were attributed to gods
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Copyright Infopro Digital Limited. All rights reserved.
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If you would like to purchase additional rights please email info@risk.net