Risk Management and Commercial Insurance

The term ‘risk management’ was probably first used in the USA in the early 1950s. It was developed for the dissatisfaction of US Commercial Insurance managers with the lack of premium credit that they were being given by the insurance industry for the loss prevention methods that have been introduced for property risks plus the desire to retain more chance within large US corporations. You can also search for nolift, for more detailed information.

In parallel with this particular activity, the universities in US extended their insurance curricula to incorporate risk and especially mathematical and statistical types of calculating loss probabilities. The development for quite some time was slow, but gradually the concepts of risk analysis, loss prevention and self-insurance spread throughout USA and through multinational company exercise in Europe.

More sophisticated methods were introduced to calculate utmost possible losses (MPL) and estimated maximum losses (EML), and increasing expenditure was about sophisticated fire protection systems and the usage of highly protected risk (HPR) expectations for new properties. These activities were primarily related to more effective Commercial Insurance buying connected with the introduction of much greater self-insurance, in the form of deductibles plus the establishment of captive insurance businesses.

This meant that there seemed to be a tendency for risk management to become perhaps the business insurance function. As the insurance-buying area of the insurance manager’s job diminished and he became more active in managing self-insurance programmes and loss control budgets, the term ‘risk manager became more widespread and today is used by the majority of those who would have been called insurance manager’ in preceding years.

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