Risk comes in many forms. It is not just the risk of loss, but the risk of poor performance or below-average ROIC that can impact valuation. In looking specifically at the sector in Blue Cross Blue Shield, what are the greatest sources of risk? Consider currency fluctuations, supply chain issues, regulatory matters, customer or competitive uncertainties, and other factors.
As an investor or manager in this sector, how would you assess and manage the risk/reward equation?