Key Insurance Processes and Their Risks

Abstract

The aim of this chapter is to highlight the main processes in an insurance company in order to decompose them. It is important to understand the value chain (see figure 5.1) of an insurance company and to see that each step of the value chain has its generic risks, which need a differentiated treatment. The main question here is, which part of a process has to be done by the first line of defence (line management) and which parts should be done by the second line of defence. As usual with all organisational set-ups there is no right or wrong, but there are different possibilities which could work, depending on the corresponding environment. In this sense the decomposition into processes and the split between the first and second line of defence need to be considered as examples and there may be good reasons to have a different organisational set up.