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What is Enterprise Risk?
Exposure to natural hazards is only one of the many
risks faced by the P&C insurance industry. An insurer’s or reinsurer’s
balance sheet supports a broad range of additional risks ranging from
non-CAT liabilities to credit, market, and operational risks.
RMS solutions for enterprise risk management
integrate our leading catastrophe risk technology within a broader
framework for quantifying and managing all sources of risk. Using our
enterprise risk models, P&C companies can optimize the use and
deployment of capital to improve operational performance and maximize
shareholder value.
P&C RAROC Methodology
The insurance industry has traditionally managed risk
on a “silo” basis, without the benefit of a common risk management
framework to provide an enterprise-wide view of risk. Our approach for
measuring and managing enterprise risk is based on applying
risk-adjusted return on capital (RAROC) methodologies to the unique
characteristics of the P&C insurance industry.
Enterprise Risk Consulting
The P&C RAROC framework forms the basis for
enterprise risk consulting engagements that address capital adequacy,
financial performance, capital consumption, shareholder value, and
reinsurance optimization.
E-Solutions
Companies wishing to analyze their enterprise risk
in-house can access our models online through the P&C RAROC ASP software
at www.pcraroc.com. This approach allows companies to leverage the
results of a consulting engagement to develop ongoing internal processes
for the measurement and maximization of shareholder value.
The P&C RAROC Partnership
The RMS and ERisk partnership brings two of the
world's leading risk management practices together, allowing insurers to
benefit from the highly complementary skills of these two firms. RMS
brings market-leading expertise in catastrophe risk modeling and has
over 10 years of experience advising insurance executives on risk
management issues. ERisk, an e-venture of Oliver, Wyman & Company,
brings strength in modeling asset and non-cat liability risk and
experience helping financial institutions apply the RAROC framework in
their decision processes.
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