New perceptions: how insurers must raise their game in credit risk management

The recent financial crises have changed the way insurers and asset managers view credit risk, revealing a fundamental misunderstanding of the risk in many companies’ portfolios. Risk managers have had to raise their game in terms of how credit risk is assessed and managed. Clive Davidson reports

With the eurozone teetering on the brink of a sovereign default and credit agency ratings now taken with large pinches of salt, credit risk management has come in for a fundamental review. But, many of those most closely involved with managing credit risk say the issue is less that the risk itself has changed, and more that the perception of it has become more acute.

Traditionally, insurers have