As the name suggests, risk function manages risk and critical function for insurance companies. The profitability of a company can get severely affected by risks, and a good risk department helps an insurance company immensely. When we talk of risks, an insurance company has to manage several risks. Some of them are mentioned next:

• Risk of fraudulent claims
• Risk from underwriting
• Cyber-security related risk
• Risk occurring from investments (for example, stock market collapse)
• Risk from competition
• Risk due to non-compliance and other regulatory mandates
  
• Strategic risks
• Operational risks