Risks and Control of Insurance Undertakings

Insurance companies are exposed to some risks that can be controlled as well as to some which are difficult to foresee. They are exposed not only to internal risks, but also to external ones. The length of some insurance contracts, which may run for many years, may compound these risks. The chapter highlights the peculiarity of features and of risks (life and non-life insurance) that the insurance undertakings have to face. Consequently, it focuses on the role of internal control systems, which become a key concern to cope with the complexity of insurance activity. The chapter ends by analysing the motivation and evolution of external supervision and regulation using a European and international vision.