Tom Hettinger explores why it is important for insurers to have an appetite for risk.

For far too long, many insurers have managed risks in silos and deprived themselves of a richer, more comprehensive approach to reducing threats and leveraging strengths.

Focusing on risk by type, such as solvency, investments, underwriting, talent attraction and retention, and operations, may appear to simplify the task of understanding threats to an enterprise. And this approach can make it easier to explain risk to management, stockholders and even board members. It might even make risk reduction more manageable and quantifiable in the short run by allowing senior management to focus on specific, targeted actions.

But over time, this focused handling of risk management falls short.

VIEW RISKS HOLISTICALLY

By moving to a more holistic approach to defining risk, one that includes both traditional, financially based risks as well as operational risks, an insurance company is presented with an opportunity to more fully understand its risks and their interactions, and to establish more meaningful risk mitigation strategies.

Premium

You need to login to access this

Login

What are CIP Points? About ANZIIF Membership