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: 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: People naturally observe risk in the form of the range of experienced gains and losses which is usually represented in statistical terms by standard deviation. In most cases, there are not enough observed values to reliably discern the true amount of losses that are possible in extreme situations. Statistical techniques that have long been applied to insurance company risks are being used to extrapolate from observed risk to extreme tails of the distribution of gains and losses. These processes are essentially an extrapolation from the “known” risk of volatility near the mean to “unknown” risk of extreme losses. “Fat tails” is a term often applied to risks where the likely losses in rare situations significantly exceeds the predictions of a Gaussian (“thin tailed”) distribution. This paper will look at the relationship between the observed risk and the extreme risk in statistical insurance r isk models and discuss how we might create a discussion among model users about the appropriateness of that relationship for specific types of risks.

Description: A discussion of the need to connect the interrelated requirements of reserve requirements, capital requirements, risk management, IASB requirements and so forth.

Description: In this article the author discusses creating a common language for ORSA, capital and stress.

Description: Metadata for entire issue

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.

Description: The ORSA should be more than a compliance requirement -- its process should be an integral element of a company's governance and risk and strategic planning process used by both management and the board on a regular feedback loop basis. Similar to that used for ERM, it along with a carefully constructed set of metrics should serve as the springboard to be used to identify, control and mitigate short- and long-term risks, as well as to enable exploitation of opportunities to add shareholder and policyholder value. Risk can represent an opportunity from which insurers can leverage their knowledge and risk management capabilities to find and maintain a competitive edge. Part of the essay collection "Risk Metrics for Decision Making and ORSA"

Description: In this article, the author explains what a CAT model is.

Description: This paper presents actuarial (mathematical) models for cyber breach probability as function of the level and allocations of security spending by a firm.