scholarly journals Governance and Risk Management in United Kingdom Insurance Companies

2009 ◽  
Vol 15 (3) ◽  
pp. 503-556 ◽  
Author(s):  
S. P. Deighton ◽  
R. C. Dix ◽  
J. R. Graham ◽  
J. M. E. Skinner
Keyword(s):  
Risk Management ◽  
United Kingdom ◽  
Solvency Ii ◽  
Insurance Companies ◽  
Successful Implementation ◽  
Regulatory Requirement ◽  
Whole Process ◽  
Enterprise Risk ◽  
History Of ◽  
The Right

ABSTRACTFor some while there has been a growing awareness from both internal and external stakeholders that the governance and risk management in United Kingdom (U.K.) insurance companies needed to be enhanced. The proposed European Union Solvency II Directive makes this very explicit and the current economic turmoil has put a much stronger emphasis on the whole process: it is being seen as the right thing to do, rather than simply a regulatory requirement. In this paper, we set out the background to and recent history of governance for U.K. insurance companies, and consider how enterprise risk management can bring together the various control frameworks needed to support that governance. Whilst no two companies are the same, and hence the solutions to these issues will vary, there are several common themes linked to successful implementation. Similarly, various barriers to success are identified, together with solutions to resolve them.

Enterprise risk management and Solvency II: the system of governance and the Own Risk and Solvency Assessment

2020 ◽  
Vol 21 (4) ◽  
pp. 317-332 ◽  
Author(s):  
Pablo Durán Santomil ◽  
Luis Otero González
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Solvency Ii ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Legal Form ◽  
Content Type ◽  
Enterprise Risk ◽  
Solvency Assessment

Purpose The purpose of this paper is to analyze how enterprise risk management (ERM), the system of governance and the Own Risk and Solvency Assessment (ORSA) have been boosted with the entry of Solvency II. Design/methodology/approach For this analysis, the authors have undertaken a survey of chief risk officers (CROs) working in Spanish insurance companies. Findings The results show that Solvency II has definitely promoted ERM in the European insurance industry and improved the system of governance of the insurance companies, and that the perceived value of the ORSA for the companies is higher than the cost. It is clear that the quality of ERM implemented by companies is higher in those that face more complex risks and with greater interdependencies – that is, larger companies, foreign insurers and insurers with several lines of business – but is unaffected by the legal form of the entity (mutual/corporation). Originality/value This study conducts primary research with surveys of CROs and develops a measure of the quality of ERM implemented by insurance companies.

Enterprise risk management for health insurance from an actuarial perspective

2012 ◽  
Vol 17 (2) ◽  
pp. 259-314 ◽  
Author(s):  
G. C. Orros ◽  
J. Smith
Keyword(s):  
Risk Management ◽  
Health Insurance ◽  
Solvency Ii ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Enterprise Risk ◽  
The Face ◽  
Known Unknowns ◽  
Over Time ◽  
Health Insurers

AbstractThis paper focuses on Enterprise Risk Management (ERM) and strategic business management for health insurance companies in our world of ‘unknown unknowns’ and the emergence of unexpected risks over time. It illustrates how Chief Risk Officers (CROs) can focus on ‘risk and opportunity management’ through an ERM framework, and thereby balance risks against opportunities, whilst being resilient against ‘unknown unknowns’ and their emergence over time as ‘known unknowns’ and ‘known knowns’. The paper has been designed to meet the broad requirements of health insurers that would like to implement an ERM framework for the effective risk management of their health insurance lines of business. Risk management for health insurers in the context of Solvency II and broader European Commission regulatory requirements is also discussed. The authors discuss how insurers can develop and apply risk management to build resilience in the face of the storms and shocks that may lie ahead.

Governance and Risk Management in United Kingdom Insurance Companies. Discussion held at the Institute of Actuaries

2009 ◽  
Vol 15 (3) ◽  
pp. 557-572
Keyword(s):  
Risk Management ◽  
United Kingdom ◽  
Internal Control ◽  
Insurance Companies ◽  
Original Research ◽  
Insurance Company ◽  
Equity Risk ◽  
Enterprise Risk ◽  
Complex Models ◽  
Wide Group

Mr M. R. Kipling, F.I.A.: This paper is entitled Governance and Risk Management in United Kingdom Insurance Companies. It is a very timely paper in light of the recent publication of the Turner review which, among other things, covers the governance of UK financial institutions.Mr S. P. Deighton, F.I.A. (introducing the paper): The paper is the first formal output from the Research and Thought Leadership subcommittee of the Enterprise Risk Management (ERM) Practice Executive Committee (PEC). It may seem odd, therefore, that it contains no original research. There is not an equation in sight, and there is only one token diagram. This is because the most important of its key themes is that there is much more to ERM than complex models and fancy mathematics.There are a number of areas associated with ERM. One of them is understanding the wider governance framework within which an insurance company must operate, and hence the introduction to that subject at the beginning of the paper. The second is how to run the very detailed identification and mitigation of the myriad of small risks across a wide group which is at the other end of the spectrum to the multi-million pound derivative transactions that manage equity risk. Our paper sees this as indistinguishable from the internal control framework that a company needs in order to comply on the governance front.

scholarly journals The History of Enterprise Risk Management at Hydro One Inc.

2021 ◽  
Vol 14 (8) ◽  
pp. 373
Author(s):  
John Fraser ◽  
Rob Quail ◽  
Betty Simkins
Keyword(s):  
Risk Management ◽  
Enterprise Risk Management ◽  
Successful Implementation ◽  
Enterprise Risk ◽  
Academic Researchers ◽  
History Of

Hydro One Inc. is widely regarded as having had one of the most successful implementations of enterprise risk management (ERM). The purpose of this article is to record the history of this successful implementation so that it will benefit other companies and organizations who are at the beginning or in the early part of their ERM journey. In this article, we delve deeper into the dynamics at work and the steps involved in the implementation of ERM. This article is an interview by Betty Simkins with John Fraser and Rob Quail so as to record the challenges, successes, and methods used at Hydro One. This article covers the period from 1999 to when John Fraser left the ERM function in 2014 but many of the processes they implemented have continued to the date of writing (2021). This article should also be of interest to academic researchers who seek to understand why some ERM implementations succeed while other flounder or fail to achieve their objectives.

scholarly journals Evaluation of the Level of Enterprise Risk Management Adoption and Maturity of Insurance Companies in Kenya

2017 ◽  
Vol 1 (2) ◽  
pp. 1
Author(s):  
Caroline Njagi ◽  
Dr. Amos Njuguna
Keyword(s):  
Risk Management ◽  
Risk Tolerance ◽  
Enterprise Risk Management ◽  
Strategic Decision ◽  
Insurance Companies ◽  
Top Management ◽  
Organizational Strategies ◽  
Risk Management Framework ◽  
Enterprise Risk ◽  
Risk Appetite

Purpose: The purpose of this study was to evaluate the extent to which insurance companies in Kenya have adopted ERM process, and then to assess the maturity, challenges and strategies in the implementation of this process.Materials and methods: The research design adopted for the study is descriptive research. The researcher conducted a survey on the 49 insurance companies of Kenya to encapsulate the factors that are relevant in articulating the extent of adoption of ERM and the level of maturity. A sample of 196 respondents was selected from a population of 245 respondents. The study used quantitative and qualitative methods of data analysis. Statistical Package for Social Sciences (SPSS) version 20 program was used for analysis. The results were presented using tables and pie charts. Similarly, qualitative data was summarized and categorized according to common themes and presentedin continuous prose form.Results: The study concluded that organizational related challenges hindered implementation of ERM programs. Results revealed that inadequate application of the risk management framework, ambiguity in roles and responsibilities in risk management, complexities in risk measurement, lack of embodiment of ERM in organizational culture, difficulty in risk quantification, linking risk information to strategic decision making, ensuring that all decisions remain within the organization’s risk tolerance, proactively identifying current and emerging risks, cost and budgetary constraints, misalignment of the risk and business operating models, risk management not seen as a priority by top management and inadequate information to make risk-based decisions hindered implementation of ERM frameworks among insurance firms in Kenya. The findings imply that organization related challenges have a significant effect on ERM implementation.Recommendations: The study recommends that there should be better organizational strategies to help improve implementation of ERM programs. It was found that building a strong risk culture, engaging consultants, building a dedicated ERM function, committed board of directors and top management, developing risk appetite statement, appointment of a Chief Risk Officer (CRO) and availing ERM budgets improved the implementation of ERM programs. Key words: enterprise risk management, adoption, maturity

scholarly journals The current demand for the insurability of liability for damage to the natural environment

2009 ◽  
Vol 55 (No. 1) ◽  
pp. 33-39
Author(s):  
E. Vávrová
Keyword(s):  
Risk Management ◽  
Natural Resources ◽  
Natural Environment ◽  
Solvency Ii ◽  
Environmental Damage ◽  
The European Union ◽  
Natural Conditions ◽  
Enterprise Risk ◽  
Potential Risks ◽  
Potential Damage

Since 2004, the basic document which has governed liability for damage to the natural environment in the European Union is the Environmental Liability Directive No. 2004/35/EC, as amended by the subsequent regulation No. 2006/21/EC. The main purpose of the legislation was to ensure that the entity responsible for the damage pays all costs for rectifying its consequences. If it concerns damage to natural environment, the operator must undertake measures for rehabilitation, replacement and regeneration of the damaged natural resources. The primary replacement, which returns the damaged natural resources to their original state, may be differentiated from complementary replacement as compensation in the case in which the primary replacement has not provided an adequate reparation, and finally compensatory replacement – compensation for the temporary loss of natural conditions. This paper aims at an analysis of the possible means for eliminating risks due to the liability for environmental damage caused by the actions of an operator whose activities potentially threaten natural environment and may cause the biodiversity damage. Risks are assessed with regard to the risk insurability criteria for potential damage to the natural environment. The importance of risk management is stressed in the sophisticated form known as the Enterprise Risk Management. Risk management is becoming increasingly important as a part of the Solvency II concept, currently in preparation, whose first and second pillars accentuate risk management in financial institutions and the consistent quantification of the obvious, hidden and potential risks.

Enterprise Risk Management Maturity Levels of the Insurance Industry in Botswana

2021 ◽  
Vol 2 (Issue 1 (January to March 2021)) ◽  
pp. 23-32
Author(s):  
Moreblessing Ngwenya ◽  
Sam Ngwenya
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Continuous Process ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Maturity Model ◽  
Enterprise Risk ◽  
Term Insurance ◽  
Risk Maturity

Enterprise Risk Management (ERM) has become a necessity in the financial sector to fulfil stakeholder expectations. Studies confirm that ERM impacts positively on the performance of firms. The main objective of the study was to assess ERM maturity levels of the insurance industry in Botswana. This was achieved through first designing a framework to measure enterprise risk management maturity levels. The ERMMF incorporated elements from COSO’s ERM framework and the AON risk maturity model obtained through literature review. Data were sourced from four strata; 9 long term insurance companies (15 respondents), 11 short-term insurance companies (19 respondents), 3 reinsurers (5 respondents), and 44 brokerages (75 respondents). While all organisations in the population were used, a sample of 114 out of possible 134 respondents was used. Data were analysed using SPSS version 16. The findings revealed that the insurance industry in Botswana had somewhat implemented ERM. It is therefore recommended that the insurance industry in Botswana should take ERM as a continuous process for growth in ERM maturity levels as such an improvement is highly likely to enhance their performance.

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