Alicia currently offers 10- and 20-year term life products with face amounts up to $50 million. 

 It has the second largest share of annual sales volume for the 10- and 20-year U.S. term life insurance market. 

 Recent mortality experience has been higher than expected.  

Alicia  reinsures all policies that have a face amount in excess of $5 million with a U.S.-based reinsurer. 

Alicia  mostly invests in high-yield U.S. corporate bonds.  

Over the past several years, management and staff turnover has been low. 

Alicia  has followed a consistent corporate strategy for several years.  

External auditors and regulators have not found any major issues with the company's management or processes. 

Alicia 's systems use state-of-the-art technology.

Please classify each of the above using the following risk categories and provide a simple explanation:

Market and economic risk 

 Interest rate risk  

Foreign exchange risk  

Credit risk 

 Liquidity risk  

Systemic risk 

 Demographic risk  

Non-life insurance risk  

Operational risk  

Strategic risk

Answer rating: 100% (QA)

Classify each of the provided points into the respective risk categories and provide explanations Market and Economic Risk Recent mortality experience has been higher than expected Alicia mostly inves... View the full answer