Stress testing

{
  "id": "MLC-T-INS-003205",
  "term": "Stress testing",
  "field": "Insurance and risk management",
  "definition": "A risk management technique that evaluates the potential impact of extreme but plausible adverse scenarios on an organization's financial health, solvency, or operational capabilities. It involves simulating severe economic downturns, market shocks, or catastrophic events to assess resilience. Financial institutions, for example, regularly conduct stress tests as mandated by regulatory bodies like the Federal Reserve.",
  "url": "https://mlchart.com/terminology/insurance/stress-testing/"
}