The Insurance Management is an essential component of the Risk Management and handles especially with the risks that may be of existential importance for the company. A risk transfer from companies to the insurer occurs, in addition to the evaluation of the risk-bearing capacity, also under consideration respectively comparison of the insurance costs (premium) versus the benefit/value. Essential elements of the Insurance Management are the protection of the balance sheet and the securing of liquidity of the company in case of an insurance event.
However in practice this looks often differently. The Insurance Management is mostly no integral part of the risk management and therefore the decisions for or against a possible insurance solution were made rarely by the corporate risk management.
In many cases, the initially set up insurance department leads its’ own life decoupled from the risk management and the decision basis for the conclusion of contracts removes on and on in practice from the originally prescribed economic and risk related framework parameters.
Out of this lack of transparency it results frequently that companies are over-insured compared to its’ risks and on the other hand that no adequate insurance coverage is ensured for possible major risks.
The interface between risk and insurance management insofar of outmost importance since there is a noticeable percentage of uninsurable risks existing which are also partly located beyond a possible risk control of the risk management.
These risks must be identified on an early stage so that the company is able to make financial provisions.