Risk-awareness heightened by downturn
Four in five risk managers at insurance firms have started measuring counterparty risks more frequently in the past 12 months, new research has discovered.
The poll by AIG UK also found that insurers are measuring their risks in greater depth, using guidance from broker rating committees, stock market analysis, their own analysis, and the Credit Default Swap spread.
Insurance firms are increasingly demanding to meet their underwriters face-to-face to build trust and to fully understand risks.
As a result of this increased risk awareness, three quarters of those polled said they have a better understanding of exposures, while more than half now consider counterparty risk at board level.
“The recent turmoil has forced companies to take a closer look at their insurers’ counterparty risks,” said Philippe Gouraud, head of major accounts practice at AIG UK.
“Many have realised that the precise assessment of each exposure is in fact very complex due to the nature of insurance.
“However, one interesting point to note is that, despite the financial crisis, the general insurance industry has remained stable and shown its resilience.
“This is because companies tend to be well-capitalised and operate within a highly-regulated environment, which helps maintain market confidence and discipline.”
Category: Insurance News
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