I've been asking myself this question for a while now.
They have a tendency to basically ignore economic/market risks due to the short-term nature of the majority of the products being sold (motor and property for example)
There is a certain degree of statistical uncertainty associated with the claims made (which is not found on the life side), and given a 1 year time horizon (for modelling purposes) the volatility of the economic/market risks is smaller (when compared to the life side).
There very few places out there that embed risk management into their processes. They seem to think it is not cost effective given the short-term nature of the products being sold. They simply accept that the fuzziness of the statistical process (for claims for example) is something that is part of the process and is not really a problem worth controlling.
I'm asking this because I have been looking more at the GI side of financial risk, and I have noticed that it is rather poorly developed (when compared to the life side).
They have a tendency to basically ignore economic/market risks due to the short-term nature of the majority of the products being sold (motor and property for example)
There is a certain degree of statistical uncertainty associated with the claims made (which is not found on the life side), and given a 1 year time horizon (for modelling purposes) the volatility of the economic/market risks is smaller (when compared to the life side).
There very few places out there that embed risk management into their processes. They seem to think it is not cost effective given the short-term nature of the products being sold. They simply accept that the fuzziness of the statistical process (for claims for example) is something that is part of the process and is not really a problem worth controlling.
I'm asking this because I have been looking more at the GI side of financial risk, and I have noticed that it is rather poorly developed (when compared to the life side).
Why does GI have such poorly embedded risk management