Strategic risk management: Facilitating risk-based insurance decisions

March 2012
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Strategic risk management: Facilitating risk-based insurance decisions

At a glance

Enterprise risk functions usually do well identifying, modelling and mitigating "knowable" risks, but face a bigger challenge identifying, quantifying and mitigating ambiguous risks. Insurers require a strategic Risk Management (SRM) solution to identify, assesses and manage enterprise-threatening losses over time.

Many enterprise risk functions do reasonably well identifying, modelling and mitigating "knowable" risks, but face a bigger challenge identifying, quantifying and mitigating more ambiguous ones, such as the ones that characterized the recent financial crisis. Accordingly, we believe that insurers require a strategic risk management (SRM) solution that identifies, assesses and economically manages potentially enterprise-threatening losses over time; in other words, SRM is a way to mitigate evolving risks before they spiral out of control.