Summer ERM Readings

Beach Choroni in Venezuela

This Summer – Sun and Fun and ERM can all go together. Eight short ERM stories for the beach.

What to Do About Emerging Risks…

Managing emerging risks requires more than just blue sky sessions to identify the black swans and unknown unknowns in the imagination.   Actions must be taken to evaluate the potential impact of these risk and plan for their emergence and track their approach. 

http://blog.willis.com/2013/04/what-to-do-about-emerging-risks/

ERM in the Hierarchy of Corporate Needs

Businesses have a hierarchy of needs just like individuals.  ERM helps to provide for one of those needs, but not the highest need. This puts the importance of risk management into the perspective that boards and executives may have. 

http://www.soa.org/Library/Newsletters/The-Actuary-Magazine/2013/june/act-2013-vol10-iss3-ingram.pdf

Creating a Risk Management Culture

Often risk culture is talked about as the tone at the top. To make that tone permeate the entire corporate culture, executives and managers need to talk the risk talk constantly.

http://www.soa.org/Library/Newsletters/The-Actuary-Magazine/2013/april/act-2013-vol10-iss2-ingram.pdf

Discovering empirical risk appetite

More than half of all insurance companies lack a fully formed risk appetite statement.  But in the course of normal operations, many decisions and actions are taken that if examined properly will reveal an empirical risk appetite. 

http://wp.me/aevO4-15W

Get Ready for ORSA

US insurers need to learn a new word – ORSA.  It stands for Own Risk and Solvency Assessment.  By 2015, all insurers with more than $500M of premiums need to prepare an ORSA report to be filed with their state regulator.  A few are ready for this but most will need to do significant preparation.  

http://blog.willis.com/2013/02/u-s-insurers-need-to-get-ready-for-orsa/

Help Wanted: Risk Tolerance

Only the experienced need apply.  Insurers with a history of risk measurement have a much easier time with forming their initial risk appetite statement.  Firms without that experience will have a hard time coming to a final conclusion. 

http://www.soa.org/Library/Newsletters/The-Actuary-Magazine/2013/february/act-2013-vol10-iss1-toc.aspx

A framework for validating your Economic Capital Model

In the last several years, economic capital models have become ubiquitous for larger, complex insurers and now a broader swath of the industry is beginning to examine the potential benefits.  The users of model outputs need assurance that the economic capital model adheres to its guiding conceptual principles, aligns with prior editions of the same model, and conforms to standards imposed by the regulator.   Model validation is the process of confirming these qualities.

http://wp.me/aevO4-15V

Trifurcation:Divide to Conquer Risk

Risk analytics often portray risk as a single quantity.  But risk has many aspects.  By splitting the projected future possibilities into three tranches, some new insights into the impact of different risk mitigation alternatives can be found. 

http://www.soa.org/library/newsletters/risk-management-newsletter/2012/december/jrm-2012-iss26-ingram.aspx

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