Insurance Companies
Risk strategy should be at the heart of any insurance organization. Risk should be a core consideration when setting strategy, formulating business plans, managing performance, and rewarding management success. Risk appetite should be clearly articulated and reflect the insurance company risk carrying capacity, business strategy, and financial goals. Processes and procedures should be in place to manage risk on an enterprise wide basis within defined boundaries, without stifling day-to-day operations.
Internal risk and capital models are at the heart of any Enterprise Risk Management framework. As insurance companies are in the business of risk, a robust stress and scenario testing process needs to be an essential part of their risk management framework.
Maximizing Risk Adjusted Returns For Insurance Companies
While U.S. insurers are making strides toward compliance with the Risk Management and Own Risk and Solvency Assessment (RMORSA) Model Act, many still have a number of material gaps. There are numerous important advantages in having a well-embedded ERM framework with clearly defined risk limits that allows insurers to exploit key opportunities and maximize risk-adjusted returns while protecting policyholders interests. Companies that do not yet have a fully operational RMORSA strategy and process have much to gain, such as a better ratings agency view of their ERM framework and better risk practices. Dedicating resources to develop an overall risk strategy will help companies with less developed strategies and processes catch up to their more advanced competitors. Market participants focus will move beyond regulatory compliance and become more strategic. With the risk management and regulatory experience that the team of Gateway Partners brings to the table, insurance clients can rest assured that their risks will be quantified and addressed properly for any market condition.
