Page 21 - Risk Management in current scenario

Insurance business
Insurance is a business of taking a risk and managing those risks. Fairness
is all important consideration for the insurance companies to maintain
the level playing field. Thus, in insurance, taking a risk and managing those
risks goes hand-in-hand. There is a greater focus of regulators world
around to implement enterprise risk management across the organization
to manage risks, as risks cannot be eliminated but can only be managed.
This leads to another topic to the risk-based capital where the capital will
be kept by the insurance companies based on risks that they undertake
as opposed to the current practice of formula-based approach. In this
case, risk and capital become synonymous, so risk management becomes
even more important in the insurance business.

Conclusion
As seen above the game of roulette and insurance business have many
similarities which all generate from future is uncertain and not known
and how does the future can be exploited for the betterment of mankind
using risk management, that is planning for future and preempting the
future. If we go into the history of risk around 500-600 years ago, it is
the planning that changed the thinking of the mankind when they started
looking future as opportunities rather than adversity.

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