Notes on the Need and Objectives of Risk Management
Risk management is essential to prevent financial disasters and achieve the objectives of capital management. The success must be sustainable, for which risk has to be prevented and managed.
The aspirations of insurance customers can be easily met if the risk is properly managed. It helps right things performances and assists carrying out the duties of care, loyalty and good faith.
The competition is beaten over by proper planning of risks. The shareholders’ stake will remain intact if the risks are systematically managed. Many time policyholders and shareholders have competing interests. The insurer has to balance them.
The development and solvency requirements are contradictory, sometimes. The disclosures, transparency and performance have become routine functions of insurance.
The investor, suppliers of inputs and marketing management have credibility. Their interests should not be deluded in the organisation.