Get Your Insurance Fix on “The Insurance Couch” Podcast! Join Oliver Lang, former CEO of InsurTech Unicorn Wefox/One Insurance, supervisory board member and advisor and Nikolaus Sühr, Co-Founder and CEO of InsurTech enabler KASKO as they bring you unique insights from their experiences in the insurance world.
This episode they talk about the Risk Appetite of Insurers:
- Every insurance Board of Directors must issue a Risk Appetite Statement.
- However, there aren’t many proper and specific Risk Appetite Statements for insurers. Yet, defining the Risk Appetite isn’t that hard.
- For a Financial Risk Appetite Statement you must define clear financial dangers and assign maximum acceptable frequencies to them. This is easier than it sounds.
- There are only 3 kinds of financial dangers: regulatory intervention, loss of rating, and drop in profit.
- Regulatory intervention is a relevant danger for every insurer, loss of rating is only relevant for commercial insurers and reinsurers, drop I profit is only relevant for publicly listed insurers.
- A Board of Directors Risk Appetite Statement must consequently broken down into operable limits, thresholds, guidelines, and controls.
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