Insurance company failure

The aim of this paper is to provide the reader with a strong insight into the reasons why insurance companies fail. No company can be considered beyond the possibility of failure and for insurance companies, whose business is covering the risks of others, this is particularly true. By drawing upon previous research, combined with case study analysis, the paper provides a comprehensive appraisal of the reasons for insurance company failure. These reasons arise out of the internal operations and the external environment in which insurance companies compete; both are explored at length. As with all good pieces of actuarial work, having looked backwards at the historical reasons for failure, the paper finishes by exploring the future. What are the danger signs that will identify those companies at risk? What can be done to prevent future failures? Why should actuaries care about the failure of insurance companies?