ERM PSOA_2

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ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR BY JABRAN NOOR ENTERPRISE RISK MANAGEMENT PRESENTED TO PAKISTAN SOCIETY OF ACTUARIES 7 APRIL 2015 TAJWEEZ ADVISORY [email protected]

Transcript of ERM PSOA_2

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ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR

BY JABRAN NOORENTERPRISE RISK MANAGEMENT

PRESENTED TO PAKISTAN SOCIETY OF ACTUARIES

7 APRIL 2015

TAJWEEZ ADVISORY

[email protected]

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ENTERPRISE RISK MANAGEMENTWHAT IS

Methods and Processes used by organisations to manage risks and seize opportunities related to

the achievement of their objectives

Methods and Processes used by organisations to manage risks and seize opportunities related to

the achievement of their objectives

TAJWEEZ ADVISORY

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ENTERPRISE RISK MANAGEMENTWHAT IS

Methods and Processes

Scan Environment

Identify Risks

Analyse RisksTreat Risks

Monitor & Assure

Lead and Establish Authority

Communicate and Report

Allocate Resources

Align and Integrate

TAJWEEZ ADVISORY

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ENTERPRISE RISK MANAGEMENTWHAT IS

organisations

Traditionally risk management was done in silos

ERM needs to be integrated across the organisation

It should encompass all activities of the organisation

Applicable to almost all types of organisations

Different organisations are exposed to different risks

TAJWEEZ ADVISORY

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ENTERPRISE RISK MANAGEMENTWHAT IS

manage risks and seize opportunities

Traditionally risk was only negative risk

Modern ERM typically focuses on both negative and positive risks

Not all risks can be elimated or should be eliminated

Risks should be managed appropriately

Not being able to seize opportunities is a risk in itself

TAJWEEZ ADVISORY

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ENTERPRISE RISK MANAGEMENTWHAT IS objectives

Not making a loss of more than X in the next year

To earn a ROE of 10%

To have enough capital to launch a new line of business

To be solvent as per regulatory requirements

To obtain a rating of ‘A’

TAJWEEZ ADVISORY

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IDENTIFY RISKSHOW TO

Hazard Risk Operational Risk

Financial Risk Strategic Risk

Property Risk

Market Risk

Legal Risk

People

IT

ManagementProcesses

Mortality Risk

Credit Risk

Price Risk

Liquidity Risk

Environment

Demographics

Competition

RISK QUADRANTS

TAJWEEZ ADVISORY

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IDENTIFY RISKSHOW TO

RISK IDENTIFICATION TOOLS

checklists interviews workshops process flowanalysis

audits team approach

facilitated workshopsscenario analysisSWOT & HAZOP

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IDENTIFY RISKSHOW TO

RISK REGISTERS &

RISK MAPS

Impact vs Likelihood

List of risks

Essential to manage risks

TAJWEEZ ADVISORY

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ANALYSE RISKSHOW TO

Qualitative vs Quantitative AssessmentsTrend Analysis and Regression

Decision Trees

Event Tree Analysis

frequency severity total loss timing

Value at Risk

Expected Shortfall

Prob of Ruin

TAJWEEZ ADVISORY

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TREAT RISKSHOW TO

Avoid the RiskAlter frequency and or severity

Transfer the risk

Retain the risk

Exploit the risk

InsuranceNon Insurance Contracts

Captives

Hedging

TAJWEEZ ADVISORY

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MONITOR AND REPORT RISKSHOW TO

Board Risk Oversight - Strategic, Operational & Financial RisksBoard Risk Committee

Chief Risk Officer (CRO)

Internal Audits

Internal Controls at all levels

Dashboards and Scorecards

TAJWEEZ ADVISORY

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RISK FRAMEWORKS

COSO ERM

Com

pone

nts

Objectives

TAJWEEZ ADVISORY

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RISK FRAMEWORKS

SOLVENCY IIOwn Risk and Solvency Assessment (ORSA)

TAJWEEZ ADVISORY

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RISK FRAMEWORKS

ISO 31000BS 31000 (British Standards Institution)

FERMA 2002

OCEG Red Book

Australia / New Zealand Standard 4360

CAS ERM Framework

TAJWEEZ ADVISORY

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RISK LESSONS

Engaged senior management and board of

directors

Independent ERM Function under CRO

Top Down governance structure

ERM Framework incorporating all risks

Risk Adjusted Measurement

Written Policies

Dashboards Risk Analytics

Integrated ERM

Risk Adjusted Optimisation

TAJWEEZ ADVISORY

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THANKYOU.

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THANKYOU.

HAZARD RISK OPERATIONAL RISK

FINANCIAL RISK

STRATEGIC RISK

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THANKYOU.