Description: When companies engage in risk management activities, they can be seen as modifying their distributions of future outcomes. Often, this takes the form of trading off a sure cost for a decrease in some potential risk of loss. Companies may carry out these activities with several goals in mind, such as reduction in earnings volatility or preservation of capital. This paper will demonstrate a method for evaluating possible strategies by dividing the effects on costs and risks into three tranches: earnings, impact and estate. The tranches can be associated with different interests of the various stakeholders. This trifurcation analysis can help to explain the risk-reward trade-offs of different risk treatment alternatives and can aid in risk-related decisionmaking.

Description: This paper presents the output of in-house research on an emerging area of risk appetite management and our global implementation best practices. It intends to provide readers with detail implementation of risk appetite framework and assessment across an organization. It provides the conceptual risk appetite framework based model- developed by the author, implementation plan, and global best practices of a risk appetite assessment across an organization. It identifies the challenges and exceptions in the risk appetite assessment with an approach to manage it effectively, and helps organizations with cost-benefit analysis. It also includes an illustrative case study.

Description: Measurement of the Volatility Risk of Traditional Actuarial Risks for use in pricing and reserving

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

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 is based on a study of causes of insolvency and decisions made by management, regulators, and policyholders over the life cycle of the insolvency.

Description: A presentation at the Actuarial Research Conference in August 2006 in Montreal. This paper discusses the Basel VaR Value at Risk test of a bank's VaR model. It proposes an alternative, Quality Control of Risk Measures QCRM Hypothesis test. The alternative is more likely to reject an incorrect VaR model.

Description: This paper introduces a rich stochastic modeling framework for understanding risks in multiple-decrement contracts. The example in the paper is a 20-year Term insurance contract. Not only are mortality and lapsation considered stochastic, but the parameters governing them are. For example, mortality risk is composed of four risk elements, including error generated in the underwriting process, volatility around the best estimate, catastrophic events that impact mortality, and the trend in mortality improvement or deterioration. When stochastically modeled, the relative contribution and risk profile of each risk element can be evaluated. Generating stochastic mortality results provides a distribution of results that an organization faces and the severity and incidence of the tail events.

Description: An introduction to the Goals-Progress-Strategy (GPS) strategic risk management framework: an original synthesis of scenario based ERM, the Logical Framework Approach, and new metrics and methods. GPS improves strategic planning and execution and enables practical management of the risks a company faces in pursuit of its business goals. The framework provides a portfolio view of a company’s strategic objectives, a return on risk-adjusted capital measure, risk-intelligent decision making, and risk-adjusted performance measurement/compensation.

Description: Abstract: An introduction to the Goals-Progress-Strategy (GPS) strategic risk management framework: an original synthesis of scenario based ERM, the Logical Framework Approach, and new metrics and methods. GPS improves strategic planning and execution and enables practical management of the risks a company faces in pursuit of its business goals. The framework provides a portfolio view of a company’s strategic objectives, a return on risk-adjusted capital measure, risk-intelligent decision making, and risk-adjusted performance measurement/compensation.