8/9/2019 What Are the Greatest Risks for 2010 Taking Into Consideration Pakistan Environment

http://slidepdf.com/reader/full/what-are-the-greatest-risks-for-2010-taking-into-consideration-pakistan-environment 1/3

8/9/2019 What Are the Greatest Risks for 2010 Taking Into Consideration Pakistan Environment

http://slidepdf.com/reader/full/what-are-the-greatest-risks-for-2010-taking-into-consideration-pakistan-environment 2/3

What are the greatest risks for 2010

taking into consideration Pakistan

environment?

1. Terrorism: The threat of terrorist attacks around the world continues to pose a risk to the

insurance industry in Pakistan as well. In a sector where financial stability is the hallmark 

of leading firms, the need for complete portfolio management for terrorism risk is

evidenced by major attacks which have happened in the past history of Pakistan.

2. Governace: The rules regulations and laws of Pakistan are subject to rapid change. And

these changes are not favorable for growth of different sectors of economy. Hence the

insurance industry is facing the risk.

3. Liquidity Risk: The risk stemming from the lack of marketability of an investment that

cannot be bought or sold quickly enough to prevent or minimize a loss.

4. Market risk: The day-to-day potential for an investor to experience losses from

fluctuations in securities prices. This risk cannot be diversified away.

5. Dynamic risk: Integral part of a speculative decision where only three alternatives are

 possible: gain, loss, or  breakeven.

6. Competitors risk: The risk of rivalry between companies to achieve greater market

share. The risk is of Competition between companies for customers will lead to product

innovation and improvement, and ultimately, lower prices.

8/9/2019 What Are the Greatest Risks for 2010 Taking Into Consideration Pakistan Environment

http://slidepdf.com/reader/full/what-are-the-greatest-risks-for-2010-taking-into-consideration-pakistan-environment 3/3

7. Intellectual risk: Insurance is a new concept in Pakistan therefore qualified persons in

this sector is few. It is an emerging concept in Pakistan , new companies need

experienced and qualified staff. There is a risk that they might be hired by other 

companies. The insurance industry faces that risk but it can be minimized by attractivesalary packages and other incentives.

8. Catastrophe risk: The possibility that insurance companies will suffer very large losses

if there is a catastrophe (a terrible event that causes a lot of destruction).

9. Systematic risk: Systematic risk refers to the risk or probability of breakdowns in an

entire system as opposed to break downs in individual parts or components and is

evidenced by co movements (correlation) among most or all the parts.

10.Reputation Risk: Reputation risk occurs when negative publicity regarding an

institution’s business practices leads to a loss of revenue or litigation. For retail payment-

related systems, reputation risk is linked to consumer expectations regarding the delivery

of retail payment services, and the institution’s ability to meet its regulatory and

consumer protection obligations related to those services. An institution’s reputation, particularly the trust afforded it by customers and counterparties can be irrevocably

tarnished due to perceived or real breaches in its ability to conduct business securely and

responsibly.