Tag Archives: ERM

How much capital should an insurer hold?

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An insurer’s management often wonders whether their company has the right amount of capital.  If they are holding too little, they may not be ready for when the next catastrophe occurs, or miss an opportunity to acquire a new affiliate … Continue reading →

For ERM, a Better Solution to Guessing Frequency and Severity Pairs for Risks

man-guessing

To compare your best guesses about frequency and severity of risks, you need to recognize that each risk likely has a wide variety of frequency severity pairs. Continue reading →

Chief Risk Officer 3.0: Darwinism at Work

CRO Darwininsm

The role of the chief risk officer (CRO) in European insurance companies has evolved quickly in the last 20 years. Now, I believe that the passage of Solvency II is moving the goalposts again. Continue reading →

ERM: Discussing Fatness of Tails in Risk Models

Taylor's Fat-Tailed Gecko , Hemitheconyx taylori

Most decision makers are familiar with the statistical average and standard deviation measures. But risk management typically focuses on unlikely “tail” events. The financial crisis helped popularize the term “fat tails” to represent the idea that these extreme events are … Continue reading →

Risk Management in Financial Institutions: Beyond the Three-Lines-of-Defence Paradigm

Holistic risk governance for Financial Institutions

In recent years, headlines about LIBOR rigging, PPI mis-selling, sanctions avoidance and rogue trading have revealed poor risk management and questionable values in the financial institutions (FI) industry around the globe. Continue reading →

Risk Appetite and Tolerance

tightrope walker

Although most insurers operate with a good risk appetite, in most cases, it is not articulated in a way that managers can connect to ERM terminology. Continue reading →

Emerging ERM Risk of 2015: Outsourcing

global-gear

Outsourcing might just be the most common business management earnings booster of the past 10 years. Which means that it is also a top candidate for becoming a major emerging risk in the near future. Continue reading →

ERM in Practice: Risk Policies and Standards

written rules

This fifth installment of ERM in Practice looks at a dozen global insurance and reinsurance groups, extracting several concrete examples from their ERM policies and frameworks. Continue reading →

Guide to ERM: Writing an ORSA Report

Reports

Insurance regulators have made the Own Risk and Solvency Assessment into one of the global Insurance Core Principles that need to be adopted in all countries. Continue reading →

Guide to ERM: Risk Measurement & Reporting

Measure

Peter Drucker is reported to have once said “what gets measured, gets managed.” That truism of modern management applied to risk as well as it does to other more commonly measured things like sales, profits and expenses. Regulators take a similar … Continue reading →