Risk Management for Financial Institutions and Insurance Quiz
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Questions and Answers

Which type of risk is related to events insured by the insurer, such as mortality, longevity, and morbidity?

  • Liquidity risk
  • Insurance risk (correct)
  • Business risk
  • Market & credit risk
  • What type of risk can occur because of internal, industry, regulatory/political, or wider market factors?

  • Insurance risk
  • Business risk (correct)
  • Liquidity risk
  • Market & credit risk
  • Which type of risk is related to potential losses due to adverse movements in financial market variables on invested assets and liabilities or on fee income?

  • Liquidity risk
  • Market & credit risk (correct)
  • Insurance risk
  • Business risk
  • Which type of risk is related to the risk that the insurer does not have sufficient liquid assets to meet their short-term financial obligations?

    <p>Liquidity risk</p> Signup and view all the answers

    Which type of risk is integral to the business model for insurance in order to meet obligations to policyholders, other customers, and creditors, but also to manage its capital efficiently?

    <p>Insurance risk</p> Signup and view all the answers

    Which city saw the rise of insurance companies due to urbanization?

    <p>London</p> Signup and view all the answers

    What is the underlying principle of insurance?

    <p>The law of large numbers</p> Signup and view all the answers

    What makes a risk insurable?

    <p>The loss must be definite</p> Signup and view all the answers

    What is the role of the insured in insurance?

    <p>To transfer risk to the insurer</p> Signup and view all the answers

    What is the purpose of price differentiation in insurance?

    <p>To differentiate between high and low-risk customers</p> Signup and view all the answers

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