Post on 20-Jul-2015
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
BY JABRAN NOORENTERPRISE RISK MANAGEMENT
PRESENTED TO PAKISTAN SOCIETY OF ACTUARIES
7 APRIL 2015
TAJWEEZ ADVISORY
JABRAN.NOOR@TAJWEEZ.COM
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
1
ENTERPRISE RISK MANAGEMENTWHAT IS
Methods and Processes used by organisations to manage risks and seize opportunities related to
the achievement of their objectives
Methods and Processes used by organisations to manage risks and seize opportunities related to
the achievement of their objectives
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
1
ENTERPRISE RISK MANAGEMENTWHAT IS
Methods and Processes
Scan Environment
Identify Risks
Analyse RisksTreat Risks
Monitor & Assure
Lead and Establish Authority
Communicate and Report
Allocate Resources
Align and Integrate
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
1
ENTERPRISE RISK MANAGEMENTWHAT IS
organisations
Traditionally risk management was done in silos
ERM needs to be integrated across the organisation
It should encompass all activities of the organisation
Applicable to almost all types of organisations
Different organisations are exposed to different risks
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
1
ENTERPRISE RISK MANAGEMENTWHAT IS
manage risks and seize opportunities
Traditionally risk was only negative risk
Modern ERM typically focuses on both negative and positive risks
Not all risks can be elimated or should be eliminated
Risks should be managed appropriately
Not being able to seize opportunities is a risk in itself
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
1
ENTERPRISE RISK MANAGEMENTWHAT IS objectives
Not making a loss of more than X in the next year
To earn a ROE of 10%
To have enough capital to launch a new line of business
To be solvent as per regulatory requirements
To obtain a rating of ‘A’
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
2
IDENTIFY RISKSHOW TO
Hazard Risk Operational Risk
Financial Risk Strategic Risk
Property Risk
Market Risk
Legal Risk
People
IT
ManagementProcesses
Mortality Risk
Credit Risk
Price Risk
Liquidity Risk
Environment
Demographics
Competition
RISK QUADRANTS
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
2
IDENTIFY RISKSHOW TO
RISK IDENTIFICATION TOOLS
checklists interviews workshops process flowanalysis
audits team approach
facilitated workshopsscenario analysisSWOT & HAZOP
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
2
IDENTIFY RISKSHOW TO
RISK REGISTERS &
RISK MAPS
Impact vs Likelihood
List of risks
Essential to manage risks
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
3
ANALYSE RISKSHOW TO
Qualitative vs Quantitative AssessmentsTrend Analysis and Regression
Decision Trees
Event Tree Analysis
frequency severity total loss timing
Value at Risk
Expected Shortfall
Prob of Ruin
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
4
TREAT RISKSHOW TO
Avoid the RiskAlter frequency and or severity
Transfer the risk
Retain the risk
Exploit the risk
InsuranceNon Insurance Contracts
Captives
Hedging
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
5
MONITOR AND REPORT RISKSHOW TO
Board Risk Oversight - Strategic, Operational & Financial RisksBoard Risk Committee
Chief Risk Officer (CRO)
Internal Audits
Internal Controls at all levels
Dashboards and Scorecards
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
6
RISK FRAMEWORKS
COSO ERM
Com
pone
nts
Objectives
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
6
RISK FRAMEWORKS
SOLVENCY IIOwn Risk and Solvency Assessment (ORSA)
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
6
RISK FRAMEWORKS
ISO 31000BS 31000 (British Standards Institution)
FERMA 2002
OCEG Red Book
Australia / New Zealand Standard 4360
CAS ERM Framework
TAJWEEZ ADVISORY
ERM PRESENTATION TO PAKISTAN SOCIETY OF ACTUARIES - JABRAN NOOR
7
RISK LESSONS
Engaged senior management and board of
directors
Independent ERM Function under CRO
Top Down governance structure
ERM Framework incorporating all risks
Risk Adjusted Measurement
Written Policies
Dashboards Risk Analytics
Integrated ERM
Risk Adjusted Optimisation
TAJWEEZ ADVISORY
THANKYOU.
THANKYOU.
HAZARD RISK OPERATIONAL RISK
FINANCIAL RISK
STRATEGIC RISK
THANKYOU.