Answer to Question #49614 in Economics of Enterprise for Obinna

Question

What are the major financial risks facing an insurance company?

Answer 1

Ffinancial risk is any risk of financial loss. Such a definition of financial risk is extremely broad, and under it you can attach any sphere of human activity that has the cash equivalent. At its core, the closest to this type of insurance are: credit insurance; investment insurance; insurance and guarantees. The limitations of the above list does not exclude that if needed, almost any type of insurance can be represented as insurance financial risk. Unlike most traditional risk which contents are generally basic and can not be decomposed into simpler components, financial risks are complex and consist of a simple risks that may have mutual communication complicating risk properties in general. One of the most important components of the financial risk is the human factor, which is an unpredictable effect on the level of risk.