How insurers can evaluate and adapt their risk-management capabilities as part of an overall competitive strategy.
Regulatory and market forces are generating incentives for property and casualty (P&C) and life insurance companies to reexamine and enhance strategies, processes, and infrastructures for measuring performance and analyzing risk.
Leading insurers evaluate risk management by aligning the risk management model to the business model and focusing on aggregate exposures (gross and net) and product. This allows risk managers to understand their organization's accumulations across the business model and to mitigate those exposures as economically or efficiently as possible.
Insurers that regularly evaluate, emphasize, and update their risk management capabilities will be better positioned to meet the expectations of policyholders, shareholders, and regulators, and to leverage their strengths competitively.
This Viewpoint explains how insurers can evaluate and adapt their risk management capabilities as part of an overall competitive strategy that includes: