S&P Exec: Risk Management A Survival Skill For Insurers
By
New York
"Risk management is one of the credit skill sets that the industry is going to need. It is a survival skill," Mark Puccia, managing director of the financial services ratings group at Standard & Poors Corp., New York, stated during the rating agencys annual conference here.
A number of speakers at the meeting indicated the insurance industry is just starting to get a handle on the issue.
And, none too soon, these speakers said. Complex products, thin profit margins, low interest rates, and, thus, paltry returns on investments, are just a few of the risks facing insurers, attendees were told.
"Companies will need well managed and understood risks," said Puccia. They need that understanding, he explained, so that they wont, for instance, find out a products risk after they have sold that product.
Among the risks discussed was the impact of guarantees in variable annuities.
