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: Statistics were invented to describe heterogeneity and are now applied to tackle alea. It may not be appropriate. Let's clarify their field of relevance.

Description: Essays advocating for incentive compensation linked to the level of risk in an organization.

Description: This paper provides an overview of those cognitive biases most often responsible for flawed risk assessments and provides practical techniques to mitigate them. Through a combination of mathematical rigor, case study, metaphor, and logic, the author highlights systematic errors in our thinking about risk and provides ways to avoid them.

Description: Essays advocating for incentive compensation linked to the level of risk in an organization.

Description: Demonstrating that incentive maximization could lead to failure using game theory. This is illustrated by the optimum strategy for the Prisoner Dilemma single period, multi period and infinite period that could be mutually destructive or beneficial.

Description: Risk management and capital budgeting are two critical components of the corporate decision process. They often need to be considered jointly at the corporate level because of their natural interaction through the dependent risk exposures and other synergetic relationships within an intricate corporate structure in a dynamic business environment. . This paper develops an integrated framework that aligns these two important corporate strategies across business divisions to optimize the streamlined enterprise strategic goal in a multi-period setting. The proposed integrated framework can serve as a practical guideline for corporate executives to optimally coordinate capital budgeting and risk management at the enterprise level.

Description: Many top-performing businesses aren’t just risk aware, but rather risk intelligent. Such a posture helps prepare companies for a major event and can demonstrate to a regulator or auditor that an appropriately strong control framework is in place. Better still, companies gain real strategic value from a “risk adjusted” understanding not only of their threats and vulnerabilities, but also the upside opportunities associated with various risks. It starts with having both qualitative and quantitative information to identify, assess and manage risks. Strategic risk management, at its core, is about creating value by increasing transparency and accountability, and quality of information. More than a mere compliance exercise, effective risk management enables more informed strategic decision making, increased accountability and transparency, a greater likelihood of organizational success, and – ultimately – competitive advantage, as borne out by many studies that correlate risk management and financial results.

Description: The actuary’s key role in the ORSA process should be to quantify the uncertainty surrounding the future financial results of the firm. By providing relevant standardized reports that clarify the uncertainty in terms easily understood by all stakeholders, the actuary will provide an essential element in the ORSA process. The dictum, "You can't manage what you can't measure." demonstrates the need to quantify risk, not just describe it qualitatively. While the ability to provide firm estimates of aggregate risk for complex organizations may not exist currently, doing so should be a target for the profession. The end result will be to enhance the financial security of the insurance industry at a time when all financial institutions are facing stakeholders skeptical about their financial condition. Part of the essay collection "Risk Metrics for Decision Making and ORSA"

Description: European insurance regulation pretends to capture and rely on the 1-year 1-in-200 VaR. But there cannot exist any scientific calibration of such measure. Why?