Insurers embrace risk systems

Insurance companies have been slower than banks to adopt advanced risk modelling techniques and technologies. But regulatory changes and business exigencies are spurring them to adopt a new generation of risk and capital management systems

Insurance companies face a number of risks, some of which they share with banks, others of which are unique to their industry. On the asset side, there are market, credit and liquidity risks. On the liabilities side, there are the risks associated with underwriting and ensuring premium income is adequate to meet claims. There is credit risk associated with reinsurance. There is the risk of a mismatch of assets and liabilities. And there is operational risk, which is often overlooked, but