Mixed Risk Management Strategies – Diversification That You Can Count On

After all this time, I am still shocked that certain investment banks (that are experts at distributing credit risk) held so much credit risk at the worst possible time. For insurers to avoid similar situations, the obvious solution is to clearly identify their roles as risk distributors or risk insurers. However, this is not always a realistic option in a world with sticky prices and volatile market shares. A more realistic solution is to develop a diverse portfolio of products backed by a diverse set of risk management strategies.

Keywords: Enterprise Risk Management