Preface to Insurance Business
Every business has its speciality and requires critical understanding and appreciation of the risks inherent in such enterprises. The risks or exposures span from business risk, operating environment risk, financial risk, regulatory risk, pricing risk, competition, industrial hazards and perils and load of others. Some of these exposures and risks can either be managed internally or transferred externally to those with the speciality to effectively pool these similar risks and manage them collectively to mitigate the effect of the occurrence. Where inevitable, the severity of such occurrence is outweighed by the pool, which has enough capacity to subsume such hazards. One of the externally transferred exposures or risks is the insurance risk.
Insurance risk is the possibility of something going wrong that would expose your business or the Insurer to financial damages. The means to transfer the hazards or perils to which a…
Source: Thisday Newspaper