Enterprise Risk Management and Diversification Effects for Property and Casualty Insurance Companies

2014 ◽  
Author(s):  
Jing Ai ◽  
Vickie L. Bajtelsmit ◽  
Tianyang Wang
Keyword(s):  
Risk Management ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Enterprise Risk ◽  
Property And Casualty Insurance

Enterprise risk management and Solvency II: the system of governance and the Own Risk and Solvency Assessment

2020 ◽  
Vol 21 (4) ◽  
pp. 317-332 ◽  
Author(s):  
Pablo Durán Santomil ◽  
Luis Otero González
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Solvency Ii ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Legal Form ◽  
Content Type ◽  
Enterprise Risk ◽  
Solvency Assessment

Purpose The purpose of this paper is to analyze how enterprise risk management (ERM), the system of governance and the Own Risk and Solvency Assessment (ORSA) have been boosted with the entry of Solvency II. Design/methodology/approach For this analysis, the authors have undertaken a survey of chief risk officers (CROs) working in Spanish insurance companies. Findings The results show that Solvency II has definitely promoted ERM in the European insurance industry and improved the system of governance of the insurance companies, and that the perceived value of the ORSA for the companies is higher than the cost. It is clear that the quality of ERM implemented by companies is higher in those that face more complex risks and with greater interdependencies – that is, larger companies, foreign insurers and insurers with several lines of business – but is unaffected by the legal form of the entity (mutual/corporation). Originality/value This study conducts primary research with surveys of CROs and develops a measure of the quality of ERM implemented by insurance companies.

scholarly journals Evaluation of the Level of Enterprise Risk Management Adoption and Maturity of Insurance Companies in Kenya

2017 ◽  
Vol 1 (2) ◽  
pp. 1
Author(s):  
Caroline Njagi ◽  
Dr. Amos Njuguna
Keyword(s):  
Risk Management ◽  
Risk Tolerance ◽  
Enterprise Risk Management ◽  
Strategic Decision ◽  
Insurance Companies ◽  
Top Management ◽  
Organizational Strategies ◽  
Risk Management Framework ◽  
Enterprise Risk ◽  
Risk Appetite

Purpose: The purpose of this study was to evaluate the extent to which insurance companies in Kenya have adopted ERM process, and then to assess the maturity, challenges and strategies in the implementation of this process.Materials and methods: The research design adopted for the study is descriptive research. The researcher conducted a survey on the 49 insurance companies of Kenya to encapsulate the factors that are relevant in articulating the extent of adoption of ERM and the level of maturity. A sample of 196 respondents was selected from a population of 245 respondents. The study used quantitative and qualitative methods of data analysis. Statistical Package for Social Sciences (SPSS) version 20 program was used for analysis. The results were presented using tables and pie charts. Similarly, qualitative data was summarized and categorized according to common themes and presentedin continuous prose form.Results: The study concluded that organizational related challenges hindered implementation of ERM programs. Results revealed that inadequate application of the risk management framework, ambiguity in roles and responsibilities in risk management, complexities in risk measurement, lack of embodiment of ERM in organizational culture, difficulty in risk quantification, linking risk information to strategic decision making, ensuring that all decisions remain within the organization’s risk tolerance, proactively identifying current and emerging risks, cost and budgetary constraints, misalignment of the risk and business operating models, risk management not seen as a priority by top management and inadequate information to make risk-based decisions hindered implementation of ERM frameworks among insurance firms in Kenya. The findings imply that organization related challenges have a significant effect on ERM implementation.Recommendations: The study recommends that there should be better organizational strategies to help improve implementation of ERM programs. It was found that building a strong risk culture, engaging consultants, building a dedicated ERM function, committed board of directors and top management, developing risk appetite statement, appointment of a Chief Risk Officer (CRO) and availing ERM budgets improved the implementation of ERM programs. Key words: enterprise risk management, adoption, maturity

Enterprise risk management for health insurance from an actuarial perspective

2012 ◽  
Vol 17 (2) ◽  
pp. 259-314 ◽  
Author(s):  
G. C. Orros ◽  
J. Smith
Keyword(s):  
Risk Management ◽  
Health Insurance ◽  
Solvency Ii ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Enterprise Risk ◽  
The Face ◽  
Known Unknowns ◽  
Over Time ◽  
Health Insurers

AbstractThis paper focuses on Enterprise Risk Management (ERM) and strategic business management for health insurance companies in our world of ‘unknown unknowns’ and the emergence of unexpected risks over time. It illustrates how Chief Risk Officers (CROs) can focus on ‘risk and opportunity management’ through an ERM framework, and thereby balance risks against opportunities, whilst being resilient against ‘unknown unknowns’ and their emergence over time as ‘known unknowns’ and ‘known knowns’. The paper has been designed to meet the broad requirements of health insurers that would like to implement an ERM framework for the effective risk management of their health insurance lines of business. Risk management for health insurers in the context of Solvency II and broader European Commission regulatory requirements is also discussed. The authors discuss how insurers can develop and apply risk management to build resilience in the face of the storms and shocks that may lie ahead.

Enterprise Risk Management Maturity Levels of the Insurance Industry in Botswana

2021 ◽  
Vol 2 (Issue 1 (January to March 2021)) ◽  
pp. 23-32
Author(s):  
Moreblessing Ngwenya ◽  
Sam Ngwenya
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Continuous Process ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Maturity Model ◽  
Enterprise Risk ◽  
Term Insurance ◽  
Risk Maturity

Enterprise Risk Management (ERM) has become a necessity in the financial sector to fulfil stakeholder expectations. Studies confirm that ERM impacts positively on the performance of firms. The main objective of the study was to assess ERM maturity levels of the insurance industry in Botswana. This was achieved through first designing a framework to measure enterprise risk management maturity levels. The ERMMF incorporated elements from COSO’s ERM framework and the AON risk maturity model obtained through literature review. Data were sourced from four strata; 9 long term insurance companies (15 respondents), 11 short-term insurance companies (19 respondents), 3 reinsurers (5 respondents), and 44 brokerages (75 respondents). While all organisations in the population were used, a sample of 114 out of possible 134 respondents was used. Data were analysed using SPSS version 16. The findings revealed that the insurance industry in Botswana had somewhat implemented ERM. It is therefore recommended that the insurance industry in Botswana should take ERM as a continuous process for growth in ERM maturity levels as such an improvement is highly likely to enhance their performance.

scholarly journals Pengungkapan Enterprise Risk Management dan Nilai Perusahaan: Peran Moderasi Umur dan Ukuran Perusahaan

2021 ◽  
Vol 31 (11) ◽  
pp. 2867
Author(s):  
Ni Kadek Ayu Asri Anggreni ◽  
Herkulanus Bambang Suprasto ◽  
Dodik Ariyanto ◽  
I Gusti Ngurah Agung Suaryana
Keyword(s):  
Risk Management ◽  
Firm Size ◽  
Firm Value ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Insurance Companies ◽  
Enterprise Risk

The purpose of the study was to obtain empirical evidence regarding the effect of enterprise risk management (ERM) disclosure on firm value with the role of age and firm size as moderating. The sampling technique used is purposive sampling technique. The data used in this study is secondary data obtained from the annual reports of insurance companies and financial institutions listed on the Indonesia Stock Exchange for the 2018-2019 period. The data analysis technique used moderated regression analysis (MRA). The results of the analysis show that ERM disclosure has a significant negative effect on the firm value of financing and insurance institutions. Firm age weakens the effect of ERM disclosure on firm value with a quasi moderator type of moderation. Firm size is not proven to moderate the effect of ERM disclosure on firm value and is a moderating predictor. Keywords : Firm Value; Enterprise Risk Management Disclosure;, Company Age; Company Size.

scholarly journals Determinants of enterprise risk management disclosures: Evidence from insurance industry

Accounting ◽  
2021 ◽  
Vol 7 (6) ◽  
pp. 1331-1338 ◽  
Author(s):  
Dirvi Surya Abbas ◽  
Tubagus Ismail ◽  
Muhamad Taqi ◽  
Helmi Yazid
Keyword(s):  
Risk Management ◽  
Stock Exchange ◽  
Enterprise Risk Management ◽  
Ownership Concentration ◽  
Insurance Companies ◽  
Equation Modeling ◽  
Management Committee ◽  
Enterprise Risk ◽  
Business Size ◽  
Risk Management Committee

The aim of this study is to determine if there is a relationship between the number of commissioners on the committee, ownership concentration, the Risk Management Committee, business size, and leverage on enterprise risk management. Take, for example, insurance companies listed on the Indonesia Stock Exchange. Purposeful sampling was used in the sampling process. Supplementary data was obtained from the website of the Indonesia Stock Exchange. Panel data regression analysis was used as the research method. Although business size had an effect on enterprise risk management transparency, board size, stake concentration, the risk management committee, and leverage had little effect. By integrating the variables Board of Commissioners Size and Ownership Concentration, as well as employing dynamic equation modeling to examine the above relationships, which have been overlooked in previous analyses, and analyzing more recent evidence from a developed world perspective, this study contributes to the management accounting literature and organization theory. The findings would be useful to Indonesian practitioners, especially those in management positions in insurance companies and financial institutions.

scholarly journals ENTERPRISE RISK MANAGEMENT PRACTICES AND ITS IMPACT ON FIRM PERFORMANCE: EVIDENCE FROM SRI LANKAN INSURANCE INDUSTRY

2020 ◽  
Vol 6 (12) ◽  
pp. 11-21
Author(s):  
Kingsley Karunaratne Alawattegama
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Positive Relationship ◽  
Management Practices ◽  
Negative Relationship ◽  
Enterprise Risk Management ◽  
Insurance Companies ◽  
Return On Equity ◽  
Corporate Managers ◽  
Enterprise Risk

Enterprise risk management (ERM) has gained an increased attention among the corporate managers in the recent past as a strategic approach to managing risk. This study empirically verifies whether the adoption of ERM has an impact on firm performance and uses both primary and the secondary data relating to the insurance companies listed on the Colombo Stock Exchange. Return on equity (ROE) is used as a proxy to measure the firm performance and multivariate regression analysis is used to analyze data. The findings of this study suggest that there is a weak positive relationship between the adoption of ERM practice and the return on equity. Out of the eight ERM functions assessed, only ‘event identification’ and ‘control activities’ show a weak positive relationship with ROE. Other ERM functions indicate that there is a weak negative relationship with ROE. The findings of this study contradict with some scholars who find there is a significant positive relationship between adoption of ERM and firm performance. Owing to the contradictory nature of the findings, this study induces corporate managers to pay a close attention to the cost-benefits analysis when designing and implementing ERM system and not to heavily invest and extensively relied upon ERM as a vehicle for creating long-term shareholder value.

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