ERM for insurance companies – adding the investor's point of view

Paul John Marcel Klumpes, Andrew Hitchcox*, Kevin McGaughey, Andrew Smith, Niel Tavener

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

A major outcome of ERM activities in insurance companies has been the bringing together of all of the key risks in the company, to be managed collectively in a holistic fashion. The authors of this paper believe that an ERM framework also needs to look beyond the company, and have regard to the risk management needs of investors, from the point of view of the contribution of the insurance company to the overall risk and reward of their total investment portfolios. To meet these needs, the ERM framework needs to provide sufficient information on topics such as systematic risk, potential correlations of earnings from future new business with macroeconomic trends, other risks to franchise value, and sources of model risk within the company. The paper does not provide solutions for the issues described above; but limits itself to describing and discussing the direction for some important new initiatives in ERM activities.
Original languageEnglish
JournalBritish Actuarial Journal
Volume16
Issue number2
Pages (from-to)341-384
Number of pages44
ISSN1357-3217
DOIs
Publication statusPublished - 2011
Externally publishedYes

Keywords

  • ERM
  • investor
  • risk

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