Insurance risk management

Insurance risk management involves identifying, assessing, and controlling the potential risks that can lead to financial losses for an insurer or policyholder. It aims to minimize these risks through strategies like underwriting (evaluating insurance applications), setting appropriate premiums, and diversifying insurance portfolios. By effectively managing risks, insurers can ensure they have adequate funds to cover claims while remaining profitable. This process not only protects the insurer but also helps policyholders feel secure knowing that they have financial support in case of unexpected events, such as accidents, damages, or illnesses.