Advanced ERM Session 1: ERM concepts and Risk categorisation

This presentation is based on a part of an academic course on Advanced Enterprise Risk Management (Advanced ERM) titled ‘ERM concepts and Risk categorisation’ and covers topics such as: fundamentals of ERM, getting started with ERM, ERM within Solvency II and the ORSA

1Session 1: ERM concepts and Risk categorisation
2Session 1: ERM concepts and Risk categorisation
3Definition of ERM (1)
4Definition of ERM (2)
5Definition of ERM (3)
6Differentiators / key enablers vs. other types of RM
7ERM as a set of techniques and processes
8ERM is an evolving concept
9Is ERM is quantitative or qualitative?
10What types of 'risk' are measurable?
11Measuring risk: statistical techniques need
12More generally risk quantification usually involves
13Imprecise nature of some impacts
14Likewise occurrence likelihoods
15Putting a 'market price' on risk
16ERM is about upside as well as downside
17Upside versus downside - the risk management team
18Benefits versus costs of ERM
19Modigliani-Miller (1)
20Modigliani-Miller (2)
21ERM and corporate governance
22Governance issues
23Misaligned interests
24Cultural issues
25ERM input to Board strategy
26Risk appetite terminology (UK Actuarial Profession)
27The ERM control cycle
28E.g. if focusing on risk appetite
29Risk frameworks
30Credit agency assessments of ERM effectiveness
31Session 1: ERM concepts and Risk categorisation
32Getting started with ERM
33Key themes (1)
34Key themes (2)
35Initial action steps
36Session 1: ERM concepts and Risk categorisation
37ERM within Solvency II and the ORSA
38Supervisor perspective
39ORSA - starts from the top
41The ORSA
42The ORSA
43Introducing the ORSA can be a demanding task
44ORSA inputs
45Risk examples
46Example questions Boards might pose
47Possible ORSA outcomes could include
48Session 1: ERM concepts and Risk categorisation
49Risk categorisation
50Risk categorisation (ctd)
51Views of Kelliher et al. (2009)
52Views of Kemp and Patel (2011)
53Concentration risk
54Systematic and non-systematic risk
55Contagion risk
56Session 1: Agenda covered
57Important Information

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