Question

Do every insurance companies have risk management department

Answer 1

INTRODUCTION

Insurance companies are in the business of taking risks of various kinds. All over the world, the insurance companies write the policies that deal with specific risks, and in many cases even underwrite exotic risks. As a direct corollary, therefore insurance companies should be good at managing their own risks. However the reality is little far from that. While these companies are good at assessing insurance risks for its policy holders, but not very good at setting up structures internally for managing their own operating and business risks. In short,

Insurance = Collective bearing of Risk

In other words, Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself all kinds of losses right from his own health, property or interest arising out of an unforeseen contingency, insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose. Risk and uncertainty are inseparable twins. While the risk as such cannot be averted, it is to be recognized that it has multi-faceted outcomes. The insurance companies

cover the uncertainty of a financial loss. The insurance companie