ERM-711-16: Risk Appetite for a General Insurance Undertaking


Reading Source: ERM-711-16 Study Note

Topics Covered in this Reading:

  • Executive Summary
  • Introduction
    • Role and Importance of Risk Appetite
    • Scope of Paper and Suggestions for Future Attention
  • Risk Appetite within Enterprise Risk Management
    • Risk and Opportunity Management for General Insurance
    • Risk Appetite and Risk Tolerance within ERM
    • Risk Appetite Framework
  • Risk Appetite Concepts
    • Defining Concepts
    • Use of Risk Appetite Concepts
  • Defining of Risk Aversion
    • Capital
    • Earnings
    • Market Size
    • Risk Capital
  • Risk Appetite Articulation and Effectiveness (A&E)
    • Articulation and Effectiveness Criteria
    • Top Down vs. Bottom Up Approach
    • Challenges of Linking Both Approaches
    • Practical Considerations
    • Maturity Profile
  • Risk Appetite Characteristics
    • Size of Undertaking
    • Long-Tail vs. Short-Tail
    • Specialist vs. Multi-Line
    • High Risk Venture vs. Low Risk
    • Nature of Ownership: Private, Public, or Mutual
    • Lloyd’s Syndicates
    • Soft vs. Hard Market
    • Stakeholder Differences: ex. Shareholders vs. Regulators vs. Management
    • Multi-National vs. Single Country
    • Multi-Platform vs. Single Platform (London, Lloyds, Bermuda, Switzerland, etc)