Paper Title :An Economic Perspective towards Specificities of Risk Management in Insurance Sector

Author :Younes Taghavi

Article Citation :Younes Taghavi , (2017 ) " An Economic Perspective towards Specificities of Risk Management in Insurance Sector " , International Journal of Management and Applied Science (IJMAS) , pp. 74-78, Volume-3,Issue-5

Abstract : Increasingly, insurers are facing a variety of strategic risks—emerging threats that could undermine assumptions at the core of a company’s value proposition and foundational business model. Innovative technologies and new competitive paradigms are impacting nearly every area of business—rapidly and radically. Armed with a strategic risk management (SRM) framework, insurers can proactively navigate these rough waters as the tides change. The potential for companies and industries to be disrupted and perhaps even displaced by transformational trends in technology, the economy, and consumer preferences is on the rise in today’s rapidly evolving, increasingly digitized economy. Insurance is facing such strategic risks—emerging threats that can undermine the core assumptions of a company’s value proposition and operations. Unlike most other industries, risk management is already a core function of insurance companies and many carriers have already adopted enterprise risk management (ERM). However, these programs are not traditionally designed to address strategic risks that are disruptive to an insurer’s value proposition or business model, and which are generally difficult to foresee, measure, and minimize. To more effectively cope with game-changing technologies and new competition from nontraditional sources, insurers should consider adopting strategic risk management (SRM) as a holistic framework to not only help them manage the potential downside of disruptive risks, but also perhaps achieve faster growth by better preparing them to capitalize on the resulting opportunities. While the disruptive threats carriers face may be transformational, a transition to SRM actually represents a natural next step in an insurance company’s risk management maturity curve. Keywords - Risk Management, Insurance Sectors, Strategic Risk Management, Technology

Type : Research paper

Published : Volume-3,Issue-5

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