Introduction

René Doff

Risk management is at the core of the insurance business. While this has been the case for some time, its importance has started to change. This increasing importance of risk management was already an ongoing process due to a better understanding of insurance companies' risks, but it had accelerated even more by the time the financial crisis began in 2008. The financial crisis has been deeply debated, and its impact on global economies will be permanent. One key theme that remains is that a better and wider understanding of the risks of financial institutions is required – and that this understanding needs to be developed throughout the industry. This book will address these changes and explain the new concepts being used in modern and best practice risk management. It will also discuss in depth the new developments that are taking place in the regulatory arena.

THE RISING IMPORTANCE OF RISK MANAGEMENT

Risk has become more and more important over the past decades. There are five basic reasons for this.

First, the insurance industry has undergone a process of deregulation. Prior to this, regulations clearly set out the rules of the game for insurance companies. The