Description: This article gives an overview of the CFO Forum diversification paper. The key points that the CFO Forum made are: 1. The lack of sufficient diversifying strategies for risk management needs to be addressed. Therefore they provided a policy framework that promotes sound risk measurement and management practices in a way that can be implemented and supervised with confidence. 2. The lack of sufficient regulatory over-site needs to be addressed, so they presented a set of core principles to form the basis of European insurance regulation. These core principle incorporate diversification in a consistent manner.

Description: This article argues that using Economic Capital as a metric does not capture all of the risks. The author suggests an alternative that better meets a corporation's overall risk management needs. This is value-based ERM, which is an approach that makes the quantification of enterprise value central to all aspects of the ERM process. It is a combination of two techniques—enterprise risk management and value-based management, and it captures all of the risks in a single metric.

Description: Complete issue of the August 2014 Risk Management newsletter.

Description: In this article, the author presents a case for using a Risk Return On Capital approach as a way to integrate desirable properties of the Economic Value Added approach and the Return On Risk-Adjusted Capital approach. The EVA approach has a shortcoming in that is does not reflect rating agency capital. The RORAC is computed as the ratio of expected total underwriting return to allocated risk capital, and represents the expected return for both benign and potentially consumptive usage of capital. The RROC approach measures returns after reflecting the mean rental cost of rating agency capital. Returns that are a reward for exposing capital to risk of loss are measured after reflecting the cost of carrying capital to support premium written and loss reserves.