The types of risk, risk analysis tools, and methods used to manage risk are always changing. Large catastrophe losses disrupt property insurance markets and lead to innovative approaches to their financing. Legal liability for environmental damage expands. Rising costs of medical care lead to the widespread adoption of managed care systems by employers and health insurers.
Corporations take a holistic approach to risk management.
Eighty percent of Fortune 1000 companies use Monte Carlo simulation software to analyze and manage risk. Hedging price risk using derivatives continues to grow at high rates. A course in risk management and insurance therefore requires that students be taught a framework for understanding the effects of risk, the tools and methods used to measure and manage risk, and the process of making risk management decisions. We believe that this new book accomplishes these tasks. Current risk management and insurance textbooks do an excellent job of describing the varied and complex institutional and contractual details of the insurance industry.