What may Risk Management invoke during a catastrophe?

During a catastrophe, Risk Management may invoke a moratorium on new business to prevent excessive risk exposure. This action is important because, in times of crisis, insurance providers need to stabilize their operations and avoid an influx of new policies that could lead to unsustainable claims if the situation worsens. By implementing a moratorium, insurers can focus on managing current policies and claims without the added pressure of new business, allowing for a more controlled response during a challenging period. This strategic decision helps maintain financial stability and ensures that the insurer can adequately meet its obligations to policyholders already in force.