Risk management is the process whereby the insurer's management takes action to assess and control the impact of past and potential future events that could be detrimental to the insurer. These events can impact both the asset and liability sides of the insurer's balance sheet, and the insurer’s cash flow. Investment risk management addresses investment related events that would cause the insurer’s investment performance to weaken or otherwise adversely affect its financial position. Various investment risks tend to focus on different parts of the investment portfolio. Market risk impacts capital investments, including stocks and real estate, as well as.
