MBA 602 – Risk Managment
Original Work Statement: I, Chris XXXXXX, verify that this article review is solely my own work and creation and it has been prepared solely for credit in this class.
Financial Risk Management by Insurers: An Analysis of the Process: ABSTRACT Santomero, Anthony M;Babbel, David F
Journal of Risk and Insurance (1986-1998);
Jun 1997; 64, 2; ProQuest Central
Main Issue of Article:
The main issue of this article is risk management in the insurance industry. It dives deep into different financial service firms to analyze how they deal with risk management. It goes over the most difficult problems that insurance companies have to address. More importantly, this article discusses the shortcomings in practices used by these companies to determine risk and ways to improve current procedures used in risk management. The range of size of companies analyzed went from $7 billion in assets all the way to well over $100 billion. Also, the companies that this paper covers includes not only firms that solely sell life insurance, but also property and casualty, long term care, and a multitude of different life/health products. Finally, these were firms that were located in the U.S. and abroad and the information contained in the article was obtained via extensive interviews by a team of researchers. Relationship to Course:
In the course outline, which is found in our syllabus, the first major topic category is the role of risk management and insurance in business and society. This article completely embodies this. Obviously, the reason we have risk management and insurance at all is to prevent a loss so devastating that it completely bankrupts you or makes a company insolvent. This is made possible by diversification,...