Management

Enterprise Risk Management: Theory, Practice and Actuaries

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The topic of Enterprise Risk Management (ERM) has been growing in prominence of late despite having a 20 or so year history, it continues to draw sharp divisions of opinion as to its importance and its effectiveness in enabling financial (and other) institutions to sustain themselves over the years.
With the GFC lingering in the background and the looming threat of a meltdown in Europe, Risk and Risk Management has been somewhat elevated in the public eye. The collapse of Lehman Brothers, the evaporation of the credit markets, the expansion of CRO‟s and an increased focus on governance failures help magnify this in the business world. Adding to that, risk, capital and deleveraging is becoming more common in the lexicon of boards and management. What will this look like in practice?
In considering how we as actuaries could improve our contribution to the current and ongoing discussion on the role of ERM, this paper attempts to look at drawing on case studies on a select set of companies (a bank, a life and a general insurer) to examine some actual cases of ERM in action and provide considered reflection on the gap between theory and real world practice. We will also be looking at the role of actuaries within these processes.
We feel this is worthwhile because of the wide doors of opportunity within the growing field of risk management opening for actuaries. This is in line with the Institute‟s strategic vision that as actuaries we need to look beyond our traditional fields – life, health and general insurance and superannuation – to embrace the opportunities that are crying out for the skills we can bring in the broader domain. There have been numerous papers written on ERM, many of which have sought to contribute on some technical aspect of ERM. This paper takes a broader approach and focuses on „the big picture‟ with the twin themes of our identity (i.e. why actuaries) and our opportunity (i.e. why ERM) in focus.

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: .,

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1-22

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English

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NONE

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Enterprise Risk Management: Theory, Practice and A

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