Description: An exploration of risk management challenges in the Middle East, including historical overcapitalization, inadequate data and governance issues.

Description: A risk map is an effective and dynamic tool in helping companies develop a broader view of their risks.

Description: This article holistically places ratemaking into its proper risk context and connects the diverse operations that have impact on ratemaking as well.

Description: The costly, time-consuming and complicated process of enterprise risk management (ERM) can be improved in many companies and made less tedious for managers by using reasonable data and templates obtained from peer group entities. The models used to calculate economic capital (EC) often underestimate its value because they do not consider decision-maker perception about risk. We assume here that managers, as the decision-makers, have appropriate business understanding and they can provide substantial information about risk characteristics regarding all business processes. Therefore we are focused, in this paper, on collecting data from managers across the different businesses to derive the appropriate knowledge about risky events, the importance of particular types of risk, the relationship between the risk outcomes and the level of risk control in a particular industry. We conclude that the collected data has a high potential for use as a benc hmarking reference and analysis for improving ERM models for individual businesses.

Description: The article explores options for defined-benefit retirement plan sponsors to transfer pension risk, focusing on recent trends in the United Kingdom.

Description: An excerpt from the SOA-sponsored research report of the same title. This article describes three elements of a strategic pension risk management framework: adjusting corporate financial metrics for corporate pension plan; the trade-off between pension risk and capital; empirical evidence of how corporate pension plans impact stock prices or credit spreads

Description: Increased attention was paid to regulatory capital with the global financial crisis in 2008. Whilst companies may not have the incentives to retain a large amount of capital in the absence of regulatory capital requirements, overcapitalized entities can have drawback such as its impact on competitiveness. There are other weaknesses in the regulatory capital model such as its limitation in facilitating risk-based decisions as regulatory capital does not necessarily reflect the economic reality and risks an entity faces. Nonetheless, there are ways for regulators and/or companies to handle the weaknesses in the regulatory capital model. For instance, granularity can be introduced in determining regulatory capital. Economic capital can be used to encourage entities to implement risk management controls and facilitate risk-based business decisions (e.g., risk-adjusted performance assessment and risk-based capital allocation). Ultimately, hav ing effective risk management and risk-based capital determination are ways to prevent company failures and bankruptcies.

Description: Financial institutions have and continue to suffer substantial financial losses because of their exposures to various operational risks and insufficient risk management. Quantifying operational risk is a critical component of an institution’s ability to manage risk. The model described in the article provides a numerical measure for operational risks existing in a business entity through statistical methods. It takes experience data to reflect both the general features and company specifics of the defined operational risks, while also allowing for managerial discretion. An important achievement is to suggest a level of capital to hold against potential losses arising from operational risks.

Description: Hear from the editor’s on the December 2018 issue of Risk Management published by the JRMS.

Description: Hear from the editor’s on the December 2017 issue of Risk Management published by the JRMS.