This document provides an overview of risk management concepts including enterprise risk management (ERM), own risk and solvency assessment (ORSA), economic capital modeling, continuity analysis, and the role of supervision. It discusses key aspects of ERM frameworks, governance structures, developing risk functions, risk policies, risk profiling processes, and qualitative and quantitative risk evaluation methods. It also outlines the purposes and processes of economic capital models, continuity analysis, and supervisory oversight. Soft skills training is also briefly mentioned.
This document discusses enterprise risk management and contains activities and content related to risk management. It defines key risk management terms and concepts, outlines the risk management process, and discusses the benefits and relevance of risk management. It also addresses regulatory frameworks, legislative requirements, and key risks associated with ineffective risk management.
MODULE 1:
Definition of Risk and uncertainty- Classification of Risk, Sources of Risk-external and internal. Risk Management-nature, risk analysis, planning, control and transfer of risk, Administration of properties of an enterprise, provision of adequate security arrangements. Interface between Risk and Insurance- Risk identification, evaluation and management techniques, Risk avoidance, Retention and transfer, Selecti9on and implementation of Techniques. Various terminology, perils, clauses and risk covers.
The document provides an overview of risk management fundamentals and processes. It defines risk, outlines the benefits of a risk management framework, and describes the key components of establishing and implementing an effective risk management system, including:
- Establishing the organizational context and risk criteria
- Identifying, analyzing, and evaluating risks
- Developing and implementing risk treatment plans
- Monitoring and reviewing the risk management process on an ongoing basis
C-Suite’s Guide to Enterprise Risk Management and Emerging RisksAronson LLC
Significant opportunities remain for organizations to continue to strengthen their approaches to identifying and assessing key risks. This program will provide an overview of Enterprise Risk Management (ERM) best practices and current emerging risks that should be on your radar for 2018.
Watch the complete webinar here: https://aronsonllc.com/c-suites-guide-to-enterprise-risk-management-and-emerging-risks/?sf_data=all&_sft_insight-type=on-demand-webinar
This document summarizes the key concepts of enterprise risk management. It discusses how risk management aims to help organizations achieve their mission and avoid surprises by dealing with uncertainty. The risk management process involves identifying potential risks, evaluating and prioritizing them, selecting risk management techniques, and monitoring risks. The roles of the board, senior management, and risk management committee in the risk management process are also outlined.
In continuation to our earlier presentations of the Business Risk Management series & case studies, we show here how the time cycles must be determined for tracking market based, credit based and operational risk.
This document discusses enterprise risk management and contains activities and content related to risk management. It defines key risk management terms and concepts, outlines the risk management process, and discusses the benefits and relevance of risk management. It also addresses regulatory frameworks, legislative requirements, and key risks associated with ineffective risk management.
MODULE 1:
Definition of Risk and uncertainty- Classification of Risk, Sources of Risk-external and internal. Risk Management-nature, risk analysis, planning, control and transfer of risk, Administration of properties of an enterprise, provision of adequate security arrangements. Interface between Risk and Insurance- Risk identification, evaluation and management techniques, Risk avoidance, Retention and transfer, Selecti9on and implementation of Techniques. Various terminology, perils, clauses and risk covers.
The document provides an overview of risk management fundamentals and processes. It defines risk, outlines the benefits of a risk management framework, and describes the key components of establishing and implementing an effective risk management system, including:
- Establishing the organizational context and risk criteria
- Identifying, analyzing, and evaluating risks
- Developing and implementing risk treatment plans
- Monitoring and reviewing the risk management process on an ongoing basis
C-Suite’s Guide to Enterprise Risk Management and Emerging RisksAronson LLC
Significant opportunities remain for organizations to continue to strengthen their approaches to identifying and assessing key risks. This program will provide an overview of Enterprise Risk Management (ERM) best practices and current emerging risks that should be on your radar for 2018.
Watch the complete webinar here: https://aronsonllc.com/c-suites-guide-to-enterprise-risk-management-and-emerging-risks/?sf_data=all&_sft_insight-type=on-demand-webinar
This document summarizes the key concepts of enterprise risk management. It discusses how risk management aims to help organizations achieve their mission and avoid surprises by dealing with uncertainty. The risk management process involves identifying potential risks, evaluating and prioritizing them, selecting risk management techniques, and monitoring risks. The roles of the board, senior management, and risk management committee in the risk management process are also outlined.
In continuation to our earlier presentations of the Business Risk Management series & case studies, we show here how the time cycles must be determined for tracking market based, credit based and operational risk.
This document provides an overview of compliance and risk management concepts. It discusses compliance as the minimum legal standard and the importance of also implementing good risk management practices. The document outlines the six main phases of the compliance process: understand legal obligations, create an obligations register, assess compliance risks, manage obligations, monitor and evaluate compliance, and communicate and report. It also discusses establishing the context for risk management, identifying risks, analyzing and evaluating risks, treating risks, and monitoring and reviewing the risk management process. The case study examples demonstrate how these concepts apply to specific compliance scenarios.
Cathy Hauslein - Susser Holdings, Speaker at the marcus evans CFO Summit Fall 2011 in Las Vegas, NV, delivered her presentation entitled Finance is Risky Business: Monitoring and Managing Your Company’s Risk Appetite
Presented at the MENA-OECD Business Integrity Training, 22-25 April, Kuwait. Organised by the MENA-OECD Investment Programme in cooperation with the IMF-Middle East Center for Economics and Finance
1) The document discusses organization level risk management. It addresses the importance of risk management for organizations' success, defining their risk attitude and thresholds, planning risks, establishing risk methodology, considering risk factors, implementing risk management, and learning from past lessons.
2) It emphasizes establishing a clear understanding of strategic risks and opportunities faced by the organization. A suitable risk methodology should guide risk management activities to achieve strategic goals.
3) Recording and applying lessons learned is important for organizational maturity. Both risks and opportunities from the past, whether achieved or missed, provide learning.
Risk Reimagined! Series- The Relationship Between Strategy, Governance and Ri...Resolver Inc.
Copyright notice: The following slides are intended for professional use within an organization for discussion purposes only. Any other uses or modifications are strictly prohibited.
In this presentation, Norman Marks and Richard Anderson discuss two related topics. The first is the relationship between the strategies set by the organization, its governance, and risks to its objectives. Their conversation addresses:
• How does a senior executive or board member gauge the effect of risk on corporate objectives?
• Is it enough to review a list of top risks at every board meeting?
• How does the board know whether risk management is adding value?
• How do you measure success?
• Where do reward and opportunity factor in?
The second topic is one that is heavily debated among practitioners, whether the concepts of risk appetite and tolerance can be applied effectively in practice. Areas they cover include:
• What is risk appetite? What is risk tolerance?
• Is it a useful concept or an overly complicated piece of mumbo jumbo?
• How can you help the board and top management set desired levels of risk and also help decision-makers take the right level of the right risks?
• Does it make sense to be “risk averse”?
A structured approach to Enterprise Risk Management (ERM) and the requirement...Hassan Zaitoun
This document provides a structured approach to implementing enterprise risk management (ERM) based on ISO 31000. It discusses key risk management principles, including defining risk, establishing a risk management process, and creating a risk-aware culture. The document advocates developing a risk architecture, strategy, and protocols to provide proper context for risk activities. It also summarizes ISO 31000's risk management process of risk identification, evaluation, response, resourcing, reaction planning, and reporting.
Risk Management Process And Procedures PowerPoint Presentation SlidesSlideTeam
The document outlines the risk management process and procedures for a company. It introduces risk management and identifies types of risk categories. It then describes the procedure for managing risks, which includes risk planning, identification, assessment, monitoring and tracking. Tools and practices for risk analysis are also covered, along with engaging stakeholders. The document closes with an overview of the risk management lifecycle.
Risk management is a critical process for any organization. It involves identifying potential risks, assessing their likelihood and impact, and developing strategies to mitigate negative risks and maximize opportunities. The document provides an overview of risk management concepts and best practices. It defines risk, discusses why risk management is important, and outlines the basic steps of the risk management process including identification, analysis, evaluation, and monitoring of risks. Various risk assessment and prioritization techniques are also presented. The goal of risk management is to increase awareness and preparedness so organizations can achieve their objectives and improve outcomes.
The document discusses enterprise IT risk management. It notes that IT is now core to business and a top audit committee concern. IT risk management covers more than just information security, including risks from late projects, lack of value from IT, compliance issues, outdated architecture, and service problems. IT risk does not come solely from the IT department but from various external partners and users. The document discusses who should own IT risk and outlines frameworks and maturity models for assessing an organization's IT risk posture.
The document discusses leveraging enterprise risk management (ERM) and the Own Risk and Solvency Assessment (ORSA) process for strategic value. It notes that ERM can help reduce uncertainty, understand opportunities, and support integrated strategy and risk discipline. The maturity of an organization's ERM capabilities is presented as a journey, with more mature organizations better integrating ERM into strategic decision making. The ultimate value of ERM is linking it to capital planning, decision support, and transparency through the ORSA process.
The document discusses various types of market, business, and financial risks. It identifies interest rate risk, credit risk, liquidity risk, volatility risk, operational risk, and market risk as key market risks. Business risks include strategic risks related to industry changes, compliance risks related to laws and regulations, financial risks related to cash flow and operations, and operational risks related to processes and procedures. Risk management strategies involve accepting, transferring, reducing, or eliminating risks through insurance policies, financial instruments, controls, and preventative measures.
This document discusses risk appetite and enterprise risk management (ERM). It provides context from 2006-2008 regarding risk appetite definitions from UK regulators. It defines risk appetite as the amount of risk an entity is willing to accept in pursuit of value and in line with strategic objectives. The value of articulating risk appetite is that it allows an entity to clarify desired risks, set the tone from senior management, and establish clear risk preferences. Stakeholders like the board, regulators, rating agencies, and others can influence an entity's risk appetite statement. Key components of a risk appetite include risk capacity, appetite, targets, and tolerances. An example risk appetite statement from ING is also provided.
The document provides guidelines for commercial banks to manage key risks including credit, market, liquidity, and operational risk. It outlines the following:
1. Risk management should have clear frameworks with oversight from senior management and boards of directors who establish risk appetite.
2. Risks are identified, measured, monitored, and controlled through defined policies, processes, management information systems, and independent review.
3. Specific areas of various risk types are overseen through dedicated risk management committees, departments and measurement systems to ensure prudent risk exposure levels.
4. Contingency planning and regular review of risk management effectiveness is important.
The document discusses the concept of risk, including defining risk, measuring risk, and the nature of risk. It then categorizes types of risk as personal risks, property risks, liability risks, fidelity risks, and risks due to vehicle ownership. The document also covers risk management, defining it as identifying, analyzing, and controlling risks. It discusses features, objectives, and methods of risk management, including risk identification, scope of managing risk, and organizing a risk management team.
Aligning strategy decisions with risk appetite
Presented by David Shearer
Monday 10th October 2016
APM North West branch and Risk SIG conference
Alderley Park, Cheshire
This document discusses financial risk management. It explains that risk management is an important business priority and outlines different types of risks including known risks, emerging risks, and unknowable risks. It also discusses high impact risks that have a low probability of occurring but could be catastrophic. The challenges of dealing with these types of risks are described. Key areas of financial risk are then outlined, including market risk, credit risk, liquidity risk, regulatory risk, and people and performance risk. Finally, the document discusses different approaches to financial risk management and outlines four key lessons: strengthen checks and balances, be prepared through anticipating scenarios, show leadership and shape culture, and understand risk.
Risk management is important for construction projects. It involves identifying potential risks, assessing their likelihood and consequences, and developing responses to manage risks. The risk management process includes four steps: identifying hazards, assessing risks, controlling risks, and monitoring control measures. It aims to reduce the probability or impact of negative events. Key risks in construction relate to costs, time, and quality going over budget or being delayed. Risk management benefits projects by improving decision making and providing clear understanding of risks.
The document provides information about the Financial Risk Manager (FRM) certification program, which involves passing two exams to demonstrate knowledge of financial risk management. It details the requirements to obtain the FRM charter, including work experience and education qualifications. Key details are provided around the exam dates and locations, registration fees, course structure and duration, and payment options for an upcoming training program in India to prepare candidates for the FRM exams.
The document outlines the National Bank of Malawi's operational risk management framework. It discusses the operational risk policy, roles and responsibilities of the board, management, and risk division. It describes the bank's approach to identifying, assessing, monitoring, and controlling operational risk. The bank has adopted the Basic Indicator Approach to measure operational risk capital charge and has developed business continuity plans to prepare for disasters. The presentation also discusses operational risk incident management guidelines and roles in reporting and addressing incidents.
The document discusses the growing partnership between risk management and business continuity management. It provides an overview of risk management concepts and frameworks, outlines the evolution from traditional to more strategic risk management approaches, and examines how risk management and business continuity management have common and overlapping stakeholders and both aim to identify and manage significant events and ensure organizational resilience through coordinated activities.
This document discusses risk management and risk treatment. It defines risk treatment as selecting and implementing responses to risks in line with an organization's risk approach and appetite. Common risk treatment methods include risk avoidance, reduction through internal controls, sharing through insurance, diversification, hedging and outsourcing, and acceptance. Risk reduction can lower the likelihood and severity of risks through activities like internal controls. Risk sharing transfers parts of risk through methods such as insurance, diversification of assets/activities, and hedging. The document also provides examples of a risk register and risk reporting.
This document provides an overview of compliance and risk management concepts. It discusses compliance as the minimum legal standard and the importance of also implementing good risk management practices. The document outlines the six main phases of the compliance process: understand legal obligations, create an obligations register, assess compliance risks, manage obligations, monitor and evaluate compliance, and communicate and report. It also discusses establishing the context for risk management, identifying risks, analyzing and evaluating risks, treating risks, and monitoring and reviewing the risk management process. The case study examples demonstrate how these concepts apply to specific compliance scenarios.
Cathy Hauslein - Susser Holdings, Speaker at the marcus evans CFO Summit Fall 2011 in Las Vegas, NV, delivered her presentation entitled Finance is Risky Business: Monitoring and Managing Your Company’s Risk Appetite
Presented at the MENA-OECD Business Integrity Training, 22-25 April, Kuwait. Organised by the MENA-OECD Investment Programme in cooperation with the IMF-Middle East Center for Economics and Finance
1) The document discusses organization level risk management. It addresses the importance of risk management for organizations' success, defining their risk attitude and thresholds, planning risks, establishing risk methodology, considering risk factors, implementing risk management, and learning from past lessons.
2) It emphasizes establishing a clear understanding of strategic risks and opportunities faced by the organization. A suitable risk methodology should guide risk management activities to achieve strategic goals.
3) Recording and applying lessons learned is important for organizational maturity. Both risks and opportunities from the past, whether achieved or missed, provide learning.
Risk Reimagined! Series- The Relationship Between Strategy, Governance and Ri...Resolver Inc.
Copyright notice: The following slides are intended for professional use within an organization for discussion purposes only. Any other uses or modifications are strictly prohibited.
In this presentation, Norman Marks and Richard Anderson discuss two related topics. The first is the relationship between the strategies set by the organization, its governance, and risks to its objectives. Their conversation addresses:
• How does a senior executive or board member gauge the effect of risk on corporate objectives?
• Is it enough to review a list of top risks at every board meeting?
• How does the board know whether risk management is adding value?
• How do you measure success?
• Where do reward and opportunity factor in?
The second topic is one that is heavily debated among practitioners, whether the concepts of risk appetite and tolerance can be applied effectively in practice. Areas they cover include:
• What is risk appetite? What is risk tolerance?
• Is it a useful concept or an overly complicated piece of mumbo jumbo?
• How can you help the board and top management set desired levels of risk and also help decision-makers take the right level of the right risks?
• Does it make sense to be “risk averse”?
A structured approach to Enterprise Risk Management (ERM) and the requirement...Hassan Zaitoun
This document provides a structured approach to implementing enterprise risk management (ERM) based on ISO 31000. It discusses key risk management principles, including defining risk, establishing a risk management process, and creating a risk-aware culture. The document advocates developing a risk architecture, strategy, and protocols to provide proper context for risk activities. It also summarizes ISO 31000's risk management process of risk identification, evaluation, response, resourcing, reaction planning, and reporting.
Risk Management Process And Procedures PowerPoint Presentation SlidesSlideTeam
The document outlines the risk management process and procedures for a company. It introduces risk management and identifies types of risk categories. It then describes the procedure for managing risks, which includes risk planning, identification, assessment, monitoring and tracking. Tools and practices for risk analysis are also covered, along with engaging stakeholders. The document closes with an overview of the risk management lifecycle.
Risk management is a critical process for any organization. It involves identifying potential risks, assessing their likelihood and impact, and developing strategies to mitigate negative risks and maximize opportunities. The document provides an overview of risk management concepts and best practices. It defines risk, discusses why risk management is important, and outlines the basic steps of the risk management process including identification, analysis, evaluation, and monitoring of risks. Various risk assessment and prioritization techniques are also presented. The goal of risk management is to increase awareness and preparedness so organizations can achieve their objectives and improve outcomes.
The document discusses enterprise IT risk management. It notes that IT is now core to business and a top audit committee concern. IT risk management covers more than just information security, including risks from late projects, lack of value from IT, compliance issues, outdated architecture, and service problems. IT risk does not come solely from the IT department but from various external partners and users. The document discusses who should own IT risk and outlines frameworks and maturity models for assessing an organization's IT risk posture.
The document discusses leveraging enterprise risk management (ERM) and the Own Risk and Solvency Assessment (ORSA) process for strategic value. It notes that ERM can help reduce uncertainty, understand opportunities, and support integrated strategy and risk discipline. The maturity of an organization's ERM capabilities is presented as a journey, with more mature organizations better integrating ERM into strategic decision making. The ultimate value of ERM is linking it to capital planning, decision support, and transparency through the ORSA process.
The document discusses various types of market, business, and financial risks. It identifies interest rate risk, credit risk, liquidity risk, volatility risk, operational risk, and market risk as key market risks. Business risks include strategic risks related to industry changes, compliance risks related to laws and regulations, financial risks related to cash flow and operations, and operational risks related to processes and procedures. Risk management strategies involve accepting, transferring, reducing, or eliminating risks through insurance policies, financial instruments, controls, and preventative measures.
This document discusses risk appetite and enterprise risk management (ERM). It provides context from 2006-2008 regarding risk appetite definitions from UK regulators. It defines risk appetite as the amount of risk an entity is willing to accept in pursuit of value and in line with strategic objectives. The value of articulating risk appetite is that it allows an entity to clarify desired risks, set the tone from senior management, and establish clear risk preferences. Stakeholders like the board, regulators, rating agencies, and others can influence an entity's risk appetite statement. Key components of a risk appetite include risk capacity, appetite, targets, and tolerances. An example risk appetite statement from ING is also provided.
The document provides guidelines for commercial banks to manage key risks including credit, market, liquidity, and operational risk. It outlines the following:
1. Risk management should have clear frameworks with oversight from senior management and boards of directors who establish risk appetite.
2. Risks are identified, measured, monitored, and controlled through defined policies, processes, management information systems, and independent review.
3. Specific areas of various risk types are overseen through dedicated risk management committees, departments and measurement systems to ensure prudent risk exposure levels.
4. Contingency planning and regular review of risk management effectiveness is important.
The document discusses the concept of risk, including defining risk, measuring risk, and the nature of risk. It then categorizes types of risk as personal risks, property risks, liability risks, fidelity risks, and risks due to vehicle ownership. The document also covers risk management, defining it as identifying, analyzing, and controlling risks. It discusses features, objectives, and methods of risk management, including risk identification, scope of managing risk, and organizing a risk management team.
Aligning strategy decisions with risk appetite
Presented by David Shearer
Monday 10th October 2016
APM North West branch and Risk SIG conference
Alderley Park, Cheshire
This document discusses financial risk management. It explains that risk management is an important business priority and outlines different types of risks including known risks, emerging risks, and unknowable risks. It also discusses high impact risks that have a low probability of occurring but could be catastrophic. The challenges of dealing with these types of risks are described. Key areas of financial risk are then outlined, including market risk, credit risk, liquidity risk, regulatory risk, and people and performance risk. Finally, the document discusses different approaches to financial risk management and outlines four key lessons: strengthen checks and balances, be prepared through anticipating scenarios, show leadership and shape culture, and understand risk.
Risk management is important for construction projects. It involves identifying potential risks, assessing their likelihood and consequences, and developing responses to manage risks. The risk management process includes four steps: identifying hazards, assessing risks, controlling risks, and monitoring control measures. It aims to reduce the probability or impact of negative events. Key risks in construction relate to costs, time, and quality going over budget or being delayed. Risk management benefits projects by improving decision making and providing clear understanding of risks.
The document provides information about the Financial Risk Manager (FRM) certification program, which involves passing two exams to demonstrate knowledge of financial risk management. It details the requirements to obtain the FRM charter, including work experience and education qualifications. Key details are provided around the exam dates and locations, registration fees, course structure and duration, and payment options for an upcoming training program in India to prepare candidates for the FRM exams.
The document outlines the National Bank of Malawi's operational risk management framework. It discusses the operational risk policy, roles and responsibilities of the board, management, and risk division. It describes the bank's approach to identifying, assessing, monitoring, and controlling operational risk. The bank has adopted the Basic Indicator Approach to measure operational risk capital charge and has developed business continuity plans to prepare for disasters. The presentation also discusses operational risk incident management guidelines and roles in reporting and addressing incidents.
The document discusses the growing partnership between risk management and business continuity management. It provides an overview of risk management concepts and frameworks, outlines the evolution from traditional to more strategic risk management approaches, and examines how risk management and business continuity management have common and overlapping stakeholders and both aim to identify and manage significant events and ensure organizational resilience through coordinated activities.
This document discusses risk management and risk treatment. It defines risk treatment as selecting and implementing responses to risks in line with an organization's risk approach and appetite. Common risk treatment methods include risk avoidance, reduction through internal controls, sharing through insurance, diversification, hedging and outsourcing, and acceptance. Risk reduction can lower the likelihood and severity of risks through activities like internal controls. Risk sharing transfers parts of risk through methods such as insurance, diversification of assets/activities, and hedging. The document also provides examples of a risk register and risk reporting.
This presentation provides a comprehensive plan for implementing an enterprise risk management program. It covers the costs/benefits of an ERM program, the critical knowledge, skills and abilities of a Chief Risk Officer, a risk taxonomy for insurance firms, a hypothetical organizational structure for an electric utility, a sample risk register, and other useful information.
With our experience and our experts, Chappuis Halder & Co would provide appropriate incentives at every level of your organization. It could help you at the time to manage “modern” risk alongside performance
The role of auditing in the erm processSalih Islam
This document discusses the role of auditing in enterprise risk management (ERM). It provides background on ERM and defines it as a structured, consistent and continuous process for identifying, assessing, and reporting on opportunities and threats that could impact an organization's objectives. The document outlines the ERM process, including determining objectives, identifying risks, assessing impacts, and selecting risk management tools. It discusses how internal auditing can provide independent assurance of ERM effectiveness and the risk management process, while not being responsible for establishing risk appetite or implementing risk responses. It also summarizes the NAIC's risk-focused regulatory surveillance framework and risk classifications.
This document discusses enterprise risk management (ERM) frameworks and best practices. It provides an overview of why ERM is important for organizations to deal with potential future uncertainties and support value creation. The document outlines the key components of the COSO ERM framework, including establishing risk management objectives, identifying risks, assessing risks, responding to risks, control activities, information/communication, and monitoring. It also discusses how to implement an effective ERM process through organizational design, risk assessments, determining risk appetite, identifying risk responses, and communication/oversight.
This document discusses risk and risk management. It begins with an overview of risk categories and types of organizational risks. It then covers establishing the risk management process, which includes identifying risks, analyzing them, integrating risks, assessing and prioritizing risks, and treating risks. It emphasizes that risk management is an ongoing process that requires monitoring and review. It also discusses risk response options and implementing controls assurance through various lines of defense and independent assurance.
This document discusses incorporating risk management into business continuity planning (BCP). It defines risk and different types of risk including hazard, financial, operational, and strategic risk. It explains that risk management aims to increase success and reduce failure, while business continuity management provides resilience and response capabilities. Key aspects of risk management and business continuity management are compared. Trends in risk management are discussed like more "emergent problems" and the need for comprehensive governance models. The implications for practitioners emphasize adopting risk management as a normal business strategy and gradually increasing testing complexity.
Critical role of_risk_assessment_in_international_projects_enVyacheslav Guzovsky
Risk is usually applied to negative events, things that might go wrong. Hopefully there are things that we can do, systems that we can put into place that will prevent bad things from happening, or at least if bad things happen, will minimize the likelihood of it being a total catastrophe. Some of these things are obvious, some of them are not so obvious and might sound like common sense, but there is a lot of science to back this up. This science is called risk management. It is a whole profession and may take you a few years to get there. The good news is it is a gradual process, and all we need to know is that it can be a handy tool for our trade and achievable by changing our working habits.
The document outlines Peter Moore's presentation on creating value through enterprise risk management. It discusses barriers to success like poor frameworks and engagement. It also covers risk management frameworks, focusing on simplicity and intuitiveness. Other sections explain risk appetite and tolerance, integrating risk management into business processes, and using key risk indicators to monitor risks. The goal is to establish a clear risk framework that creates value by better informing decision-making and resource allocation.
Internal auditing's core role with regard to ERM is to provide objective assurance to the board on the effectiveness of an organization's ERM activities to help ensure key business risks are being managed appropriately and the system of internal control is operating effectively. ... * Evaluating risk management processes.
Rohit Kumar Chawda has over 25 years of experience in risk, compliance, operations, and client servicing for major asset management companies in India. He developed a unique risk framework at Peerless Funds Management Company covering operational, regulatory, reputational, and financial risks across all departments. Riskindia.com provides cost-effective risk management support to asset management companies through training and consultations. They help create risk frameworks and inventories, standard operating procedures, risk assessments and controls, risk dashboards, and action plans to minimize residual risks through continuous engagement. Stakeholders in the risk framework include department heads, risk champions, management, and the risk management committee.
The purpose of the presentation is to safeguard the organization, its customers, reputation, assets, and stakeholders by identifying and managing risks to meet business objectives in a controlled, responsible, and sustainable manner. Risk assessment involves identifying exposures, assisting with risk-adjusted decisions, and considering the impact of risk management. Quality risk management establishes a common risk framework, defines roles and responsibilities, and provides transparency and oversight of risk practices. Sustainability reporting measures environmental, social, and economic performance indicators related to operations.
Risk Management in Banks - Overview (May 2024)Kristi Rohtsalu
Risk is at the heart of banking – and so is risk management. In a regulated bank, it is crucial to take a holistic view, including economic and normative perspectives. This material gives an overview of enterprise risk management in banks; specifics by risk type – credit risk, market risk, operational risk, liquidity risk, and other relevant risks – are not discussed here.
This presentation provides an overview of enterprise risk management (ERM). It defines risk and ERM, outlines the key components of an ERM framework including risk identification, assessment, and response. It discusses the roles of management, the board of directors, and internal auditors in ERM. The presentation traces the evolution of risk management from a focus on hazards to a holistic enterprise-wide approach. It emphasizes that strong internal controls are essential to effective ERM.
The document defines risk and issue, outlines the risk lifecycle and management cycle, and provides details on risk identification, analysis, assessment, and management. Key points include:
- A risk is a potential future event that could negatively impact objectives, while an issue is a current problem.
- The risk management cycle includes identifying risks, assessing them, selecting strategies, implementing controls, and monitoring/evaluating.
- Risk identification involves knowing the organization's assets and sources of risk. Risk analysis assesses the likelihood and impact of risks.
This document summarizes a presentation on leading risk culture change by Linda Conrad of Zurich, Paul Walker of St. John's University, and Johan Willaert of Agfa Corporate Center. It discusses establishing leadership support for enterprise risk management (ERM), defining the scope of risk initiatives, mapping strategic risks, conducting risk assessments, setting action plans, and periodically reviewing risk management processes. The presentation emphasizes aligning ERM with business strategy, quantifying risks, gaining senior management buy-in, and communicating with stakeholders to develop a proactive risk culture.
Risk seminar - john crawley & emer mc anenyИван Вали-Пур
This document provides an overview of risk management concepts including:
- Definitions of risk and risk management from various standards and frameworks.
- The ISO 31000 risk management framework and process which includes establishing context, risk identification, analysis, evaluation and treatment.
- Key aspects of enterprise risk management, governance, compliance and their relationship to each other under the umbrella of GRC (governance, risk, compliance).
- Attributes of effective risk management including being proportionate, aligned, comprehensive, embedded and dynamic.
This document discusses the key steps in a risk management process:
1. Identifying risks through risk statements that define the root cause, consequence, and downstream impact.
2. Analyzing and prioritizing risks by estimating their probability, impact, and exposure.
3. Planning risk actions by developing strategies to reduce exposure for high-priority risks.
4. Tracking risks and reporting changes in their status to ensure risk plans stay up-to-date.
5. Controlling risks by monitoring plans and taking corrective actions in response to triggering events.
The document discusses the risk management process, including key drivers, risk analysis, risk identification by source, and risk assessment. It describes the main steps and considerations for risk analysis, including quantitative and qualitative approaches. It also outlines some common sources to identify risks, such as risk registers, audit reports, impact analyses, reviews, and analytical tools like SWOT and PESTLE. Effective risk management requires identifying risks from multiple sources, analyzing their likelihood and potential impact, and ongoing monitoring and assessment.
2. Part 1: qualitative
1. ERM
2. ORSA
3. Softskill training (pass)
4. Economic and supervisory capital, continuity
analysis + role of supervision
5. Softskill training (pass)
3. Part 2: quantitative
6. Risk measures
7. Dependencies + risk capital
8. Standard model Solvency II
9. Capital allocation +
performance measurement
10.Valuing insurance liabilities
11.Risk management game + case (grade)
10. Setting the scene: What is ERM?
No universally accepted definition
Broad
• all risks faced by the insurer
– ‘downside’ and ‘upside’ risks
– internal and external sources
– company-specific and systematic risks
– quantitative and qualitative risks
• interests of all stakeholders of the insurer
11. Setting the scene: What is ERM?
Process
• totality of systems, structures and processes
to identify, treat, monitor, report and
communicate all sources of risk
• systematic organisation of and coordination
between risk functions (integrated versus
‘silos’)
12. Setting the scene: What is ERM?
holistic consideration of risk information relating
to:
• past events (losses)
• current performances (risk indicators)
• future outcomes (risk profile or risk assessment)
14. ERM framework
ERM framework should be proportionate to
- Nature: product diversity
- Scale: small versus large insurer
- Complexity: local versus global
of risks to which the insurer is exposed to.
15. Governance and risk management
• Corporate governance
- processes by which organisations are directed,
controlled and held to account
- relationship between board, managers and
owners
• Risk management
- enables and facilitates the exercise of direction,
control and accountability
- manifests as a board committee and/or board
charter responsibility
16. Board
Ultimate responsible for ERM framework
• Demonstrable support
• Approving the overall risk management
strategy/policy
• Setting the risk appetite
• Overseeing the process of ensuring the ‘responsible
persons’ are fit and proper
• Monitoring key risk by ensuring the implementation
of a suitable risk management and internal controls
framework
17. Risk committee
Assisting the board in their responsibility
Responsibilities:
• Effectiveness of the risk management framework
• Compliance with supervisory requirements
• Establishment a suitable independent risk function,
with authority, standing and resources to
effectively execute its mandate
• Monitoring the adequacy of corporate insurance
covers
18. Risk committee
Enablers
• Establish direct reporting line between
committee and most senior risk executive
• Schedule regular one-on-one meetings between
the chair of the committee and most senior risk
executive outside formal meetings
• Arrange time for meetings without executive
management
• Consult external experts
• Report transparantly without ‘filtering’
20. How is the CRO positioned?
• CFRO
• Member of the board
• Independent position
21. Developing a risk function
In practice: fragmented risk structures
• Actuarial/research function
• Internal audit function
• Business continuity team
• Reinsurance department
• Treasury and credit risk function
• Capital management function
• Market risk assessment function
• Health and safety experts
• Fraud and investigations experts
• Compliance teams
22. Developing a risk function
Risk function act and is seen acting in a
coordinated fashion (a common lens)
• shared understanding of risk tolerance
• quality and transparancy of risk information
• alignment of incentives with management of risk
• connection of risk with capital management
• governance structures
• clear accountabilities between line and risk
management
• strong direct links with strategy and operations
23. Developing a risk function
• Risk tolerance
- Does a board-approved risk tolerance exist?
- If so, is it understood by people making day-to-
day underwriting, investment and reinsurance
decisions?
- Is it appropriate having regard to the insurer’s
strategic objectives?
24. Developing a risk function
Projectmanagement required (no ‘quick fix’)
• Money: manage costs/benefits
• Organisation: executive-level ownership
• Time: detailed planning with milestones
• Information: objective reporting (‘bad news’)
• Capacity: experienced and skilled resources
• Quality: clear objectives of outcomes
25. Common risk language
Plethora of ‘competing’ risk language can
undermine the effectiveness of ERM:
• confuse people not directly involved in ERM
• reinforce a ‘silo’ approach
• focus on ‘form’ over ‘substance’
• proliferation of process inefficiencies and
duplications
• make aggregation of risks difficult
26. Common risk language
Attibutes and practices:
• common risk categories
• ‘top-down’ risk rating system
• standard templates
27. ‘Upside’ risk management
Practices that support integration of the
management of upside and downside risks:
• Ensuring risk function is involved in strategic planning
• Including both risks and opportunities in risk reports
• Reward systems that encourage calculated risk taking
• Reporting on emerging, industry-wide, cross-border
and longer term risks
28. Risk culture
Behaviours:
1. feel confident to speak up (encouraging
environment)
2. have skills, capability and empowerment to manage
risk situations (training, role clarity and
accountability)
3. improve prevention, detection and recovery of risks
continuously
34. Risk tolerance
• 3 – 5 years
• earnings volatility
• regulatory capital (supervisor)
• capital ‘strength’ for desired rating level
(rating agency)
• economic capital for ‘risk of ruin’
(policyholders)
• dividend paying capacity (shareholders)
35. Risk tolerance
• maximum exposure to aggregation of risk
• maximum acceptable net catastrophic loss
• minimum acceptable pricing principles
• descriptions of unacceptable operational risk
scenarios
• ‘go/no-go’ criteria for strategic projects
40. Influences on risk profile
• Unexpected losses and significant control
failures or incidents (looking back)
• Movements in key risk indicators (present)
• Outputs from periodic risk assessments at the
enterprise and business unit levels that have
regard to business as usual activities, new
initiatives/strategies and external events
(looking forward)
41. Feedback loop
• Establishment of thresholds for reporting
significant issues
• Reporting of risk aggregations to identify
where limits (and potentially risk tolerance)
may have been exceeded
• Protocols for escalation of issues to various
levels and management and, if necessary,
supervisors
42. Emerging risks
Emerging risks are developing or already known
risks which are subject to uncertainty and
ambiguity and are therefore difficult to quantify
using traditional risk assessment techniques
53. Advantages of risk profiling process
• Awareness of the (relative) nature of risks
• Consistency and understanding by collating and presenting a
shared view of the most significant risks from time to time.
• Transparency to the board and an opportunity for the board
to review management’s formal assessment of significant risks
• Efficiency by ensuring that management effort/risk mitigation
is prioritised to the areas of greatest assessed risk
• Learning and continuous improvement through taking action
to alter and ideally reduce the risk profile
• Culture of proactive risk management that supports
innovation and sustainability
54. Risk profile
Inherent risk Residual risk Controls
High Low Effective
High High Ineffective
Low Low Over-controlled
56. Results of risk profiling process
• Descriptions of risks
• Categories of risk for aggregation
• Causes or conditions giving rise to a given risk occurring
• Consequences of risks (financial and non-financial terms)
• Rating criteria for risk assessment (financial and/or non-
financial proxies for ‘high’, ‘medium’, or ‘low’ risks)
• Inherent risk assessment (likelihood and impact of risk).
• Effectiveness of controls and/or risk mitigation strategies.
• Residual risk assessment
• Action(s) to bring unacceptable residual risk within limits
57.
58. Exercise
How are the contents of ORSA addressed in the
report of your organisation?
60. Riskmanagement
Master in Actuarial Analytics
Lesson 4: Economic and supervisory capital,
continuity analysis and role of supervision
(IAA: Chapter 7 to 9)
63. Economic Capital Model
• Holistic assessment of key risk drivers
• Asset and liability projections
• Future balance sheets
• Profit and loss statements
• Cash flow statements
• Projected distributions of profit
• Capital and Return on Capital
65. Economic Capital Model Process
3. Simulation approach
– Deterministic versus stochastic
4. Risk metrics
– VaR versus TailVaR
– Time horizon
– Confidence level
5. Modelling criteria
6. Implementation
– fully integrated versus univariate model
66. Purposes of Economic Capital Model
• Economic capital requirements
• Disaster Planning
• Investment strategy
• Mergers, acquisitions and divestments
• Capital allocation
• Reinsurance programmes
• Optimal business mix
• Reserving volatility
• Capital outflow / inflow policies
69. Continuity Analysis
• Ongoing versus run-off basis
• Time period of modelling:
multi-year approach (medium term)
• Reliability and sufficiency of longer term
forecasts
71. Business Continuity Management
• An essential part of operational risk management.
• Business continuity planning enables to anticipate,
identify and assess business interruption risks.
• A properly documented and tested Business
Continuity Plan (BCP) reduces the impact of
interruptions on key business processes and, most
importantly, protects reputation.
• A robust BCP also allows to explain to stakeholders
and industry supervisors that risks associated with
potential business interruptions can be managed.
72. Crisis Management Planning
• A Crisis Management Plan minimises business impact
and loss in the event of a significant incident by
providing a clear and organised response strategy
supported by predefined response procedures
• At the core of critical incident management is
Business Continuity Management (BCM), which
provides an organisation with a disciplined capability
to continue to operate sustainably in the face of
potential significant business disruption.
73. Role of supervisor
• Prudential supervision is accepted worldwide as an
integral component of the regulation of financial
institutions
• The fundamental premise underpinning the
supervisory role is that the primary responsibility for
financial soundness and prudent risk management
within a supervised institution rests with the Board
and senior management
• In this context the primary emphasis of supervision is
on avoidance of problems rather than penalizing
those who may be found to have caused problems
74. Role of supervisor
• Financial oversight
• Mandatory licensing
• Ongoing operational requirements e.g. prudential
standards
• Procedures and processes for monitoring compliance
with license conditions and ongoing operational
requirements
• Where necessary, undertaking action either to force
a non-compliant insurer into compliance or remove it
from the industry
75. Risk-based supervision
• Consideration of:
– the nature of insurer’s business
– strategic/business plans
– governance arrangements
– financial condition reports
– strategies and processes to manage risk
• Licensing and ongoing supervisory activities
typically involve review of documents relating
to these areas.
76. Supervisor Relationship Management
Insurers should consider adopting a set of high-level
principles to guide engagement with supervisors. In
developing a set of appropriate principles, insurers
should have regard to:
• Alignment with supervisory objectives
• Preservation and enhancement of corporate
reputation
• Proactive and early engagement
• Communication transparency
• Relationship management accountability and
coordination
77. Supervisor Relationship Management
• Nature of interaction with supervisors
– Operational / procedural
– Non-standard / unusual
– Strategic
• Supervisory policy development
• Supervisory visits
78. Exercise
What are the model risks (limits, assumptions)
of the economic capital model of your
organisation?
96. Question 2: diversification
Correlation matrix
Question 2: Calculate 𝑉𝑎𝑅0,99(𝑋1 + 𝑋2 + 𝑋3) by
making use of the square-root formula. What is the
diversification effect? What are the assumptions?
1 0,5 0,7
0,5 1 0
0,7 0 1
100. Available capital
• Assets that cover liabilities
• Risk capital that serves as defence against risks
• Excess capital that has no business function
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 = 𝑀𝑉𝐴 − 𝑀𝑉𝐿
• Insolvent: 𝑀𝑉𝐴 − 𝑀𝑉𝐿 < 0
• Solvent: 𝑀𝑉𝐴 − 𝑀𝑉𝐿 > 𝑟𝑖𝑠𝑘 𝑐𝑎𝑝𝑖𝑡𝑎𝑙
101. Risk Capital
• Economic risk capital
– Run-off basis
– Going-concern basis
– Reference company basis
• Rating capital
• Solvency capital
124. Market consistent valuation
The market consistent value of a company is a price
at which the company could be sold to an
independent rational investor who knows the
company well.
• Hedgeable risks: replication with liquid financial
instruments
• Non-hedgeable risks: no replication possible e.g.
operational risk -> standardized procedures
126. Exercise: Scenario analysis
1. Shares crash: 40%
2. Euro-crisis:
50% BB EU-bonds and 30% EU-corporate
bonds
3. Economic environment developes as planned
positively. The insurance business remains
constant.
127. Questions
1. Which of the three scenarios are appropriate
for ORSA?
2. Calculate the stand-alone risk capitals for
each scenario. Is the minimum regulatory
capital requirement coverage met?
3. Place the three scenarios in a risk matrix
4. What measures could the insurer take for
every scenario?
128. Answers
1. Scenario 1 and 2: risk profile
Scenario 3: base
2. Minimum regulatory capital requirement =
€ 120/150% x 120% = € 96
– Scenario 1: € 120 - € 28 x 40% = € 108,8
– Scenario 2: € 120 - € 63 x 50% - € 56 x 30% = €
71,7
– Scenario 3: € 120
3. Risk matrix: likelihood and impact
129. Answers
4. Risk control measures
• Scenario 1: set control limits
• Scenario 2:
– convert non-investment grade bonds to investment
grade bonds and/or hedge with CDS
– convert EU-corporate bonds to corporate bonds with
higher ratings and/or lower concentration risk of EU-
corporate bonds
• Scenario 3: risk management (reinsurance,
product development, capital investments)