The Insurative Model
- Topics:
- Enterprise Risk Management
- Tags:
- Business Operations,
- Security,
- Risk Management,
- Management,
- Insurance,
- Financial Services,
- Financial Planning,
- Finance,
- Corporate Insurance,
- Capital Management,
- ...
FREE Registration is required
Overview: The article explains the Insurative Model which is useful in risk management. Capital management and risk management are two sides of the same coin. Conventional finance theory treats them separately. Capital management focuses on delivering the optimal balance sheet, composed of equity and debt, that minimizes the cost of capital. It is the domain of the CFO. Currently, the term “risk management” refers to the roles of the risk manager and treasurer, working separately in the insurance and capital markets to manage the firm’s operational and financial risks. Simple intuition tells us that capital and risk are related. With a multitude of forms of capital and rapidly developing risk management techniques, it is natural to treat capital management and risk management as two distinct topics. This simplification comes at a price: By considering capital structure and insurance strategies in isolation, we fail to account for important connections between them.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: HTML | Date: Aug 2001 | Pages: 1
