The Kroger Company will be referred to a KR. This paper will cover six topics: (1) analyze factors that affect risk management in the insurance industry; (2) analyze risks specific to the insurance industry; (3) analyze the impact of regulatory and other market factors on expected savings; (4) evaluate financial strategies that can be applied to minimize the risk of loss; (5) analyze expected savings based on proposed risk management strategy; and (6) synthesize analysis into final recommendation for the risk management strategy.
Factors affecting risk management in the insurance industry
Insurance Companies compete with one another for a larger portion of the market share. The Bureau of Labor Statistics expects average growth in the insurance industry in terms of the number of new jobs that will be created between 2008 and 2018. With minimal growth to look forward to, insurance agents and companies will have to differentiate themselves in the marketplace by meeting a number of critical success factors” (Lewis, Jared, 2011).
There are numerous factors that affect risk management is the insurance industry. The insurance industry is faced with many different kinds of risk these include these include both insurance-specific risks as well as investment risks.
In the past there has been seen a dramatic rise in the number of insolvent insurers. Some of the insolvencies were precipitated by rapidly rising or declining interest rates. Others resulted from losses on assets such as junk bonds, commercial mortgages, CMOs, real estate and derivatives. Mispricing of insurance policies, natural catastrophes, and changes in legal interpretations of liability and the limits of coverage hurt still others. The rotating of policies by dishonest sales agents, insolvencies among the reinsurers backing the policies issued, noncompliance with insurance regulation, and malfeasance on the part of officers and directors of the insurance companies affected some as well.... [continues]
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