Enterprise Risk Management is essential to the realization of an entity’s goals and objectives, particularly financial solvency and profitability. At Foresight, we help organizations implement and refine their ERM practices including: risk identification, risk quantification, risk monitoring, appropriate remediation of risk, and governance over risk management processes.
In financial and insurance industries, risk management frameworks are increasingly mandated by regulators as part of capital and solvency systems, and more receently, actuarial valuation standards. Regulators are also expecting more from companies as part of regular risk-focused examinations. Rating agencies continue to apply greater emphasis on the effectiveness of an institution’s ERM practices and Board involvement. And Boards continue to ask harder questions about difficult risks such as cyber, market volatility, political uncertainty, climate change, and business continuity risks.
Foresight helps our clients move into the future, confident of their ability to fully assess and mitigate their material risks. We have experience in all phases of risk management including defining and monitoring risk and implementing control measures to mitigate breaches of defined tolerances.
Examples of ERM elements that Foresight is prepared to assist you with:
- Risk Governance. Establishing committees, policies and standards that define the framework as to how risk will be managed within the organization.
- Risk Identification. Methods and processes to identify key and emerging risks.
- Risk Quantification. Quantifying tail risk amounts for both quantifiable risks (e.g. market risk) and non-quantifiable risks (operational risk, cyber, litigation) using Value-at-Risk (VaR), heat maps, risk expert interviews, and more. Understanding and calibrating the aggregation of individual risks.
- Risk Monitoring. Establishing simple tools to monitor the ongoing degree of risk versus a pre-defined tolerance for risk.
- Risk Remediation. Defining a process for approving and executing appropriate remediation actions when necessary.
- Risk Strategy. Create a Risk Strategy that aligns with the Business Strategy and provides a path for the organization to meet its strategic objectives.
- Risk Tolerance, Risk Appetite, and Limit Framework. In alignment with the Risk Strategy, define the company’s appetite for risk and the limits necessary to keep risks within defined tolerances.
- Risk Culture. Methods and strategies to create a risk-aware culture throughout the organization such that decision-making is risk-focused and transparent.
- Risk Controls. Applying COSO to processes and systems to ensure quality.
- Risk Reporting. Defining appropriate reporting cycles with audience-focused communications.
- Economic Capital. As a measurement tool, economic capital models are increasingly expected by regulators and rating agencies.
- Own Risk and Solvency Assessment (ORSA). Creating an ORSA process and report that effectively communicates the risk situation of the organization on an annual basis.
Contact us to see how Foresight can help with your ERM needs.