Credit risk modeling techniques for insurance

Insurance sector contributes significantly to any economy, it also carries inherent dangers. The proper management of credit risks is critical to the success of each insurance institution and other financial companies; consequently, if credit risks are not well managed, most organizations, particularly those whose main activities deal with day-to-day risk management, may fail. Kokobe (2016) stated that anticipating and evaluating credit risk and the chance of default of a firm entails identifying and analyzing risks, designing and executing risk-handling techniques, methodologies, and models in order to mitigate the impact of risk on the fim’s financial performance. The goal of this research is to learn about the best strategies for estimating credit risk in insurance. To investigate the link between risk management approaches and insurance company financial performance. To investigate the impact of credit risks on insurers and their benefits. As a result, this study will investigate the factors that influence credit risk application as well as the limits of current modeling procedures among insurers. Mathematics Subject Classification: 34A08, 65M06, 65N12, 35R11.