Insurance risk

Risk is taken by the insurance company in the event of damage. When an insurance company takes in money in premiums, they then bear the risk for their customers, also called policyholders.

What is asset risk?

Asset risk is the measure of an asset's standard potential or fluctuations in market value.

What is blended risk?

Blended risk has two meanings in insurance. First, it is the combination of traditional reinsurance products with capital market products such as securities and futures. Secondly, it is a limited risk reinsurance program that involves a small amount of risk transfer.

What is assumption of risk?

If a person is aware of the consequences of a particular act and voluntarily accepts that risk, he or she is solely responsible for any damages that occur.

What does reinsurance mean?

Reinsurance occurs when several insurance companies share risk by purchasing insurance from other insurance companies to limit their own total loss in the event of a disaster. The idea is that no insurance company has too high a risk of paying out large compensations for damages by themselves.

What is an Underwriter?

Underwriter is a professional role within the insurance industry. A person who identifies, examines and classifies the degree of risk that a proposed insurance policy represents to determine whether or not to provide coverage, and if so, at what rate.

It is common for the underwriter to have tasks within multiple areas at the insurance company. It can, for example, work on preparing insurance solutions for customers and then assess what risk they pose, and then determine the premium which could pay for the insurance. But in addition to this, they can also help out building completely new insurance products.

An Underwriter's is often supported by an Actuary to make statistical calculations, for example of how great the risk is for certain people, geographical areas, and time periods.