Strong risk culture leads to effective ICAAP
Financial Services Forum 2016
The purpose of the presentation is to discuss how an strong risk culture contributes to an effective ICAAP and capital management practices. We will explore ways in which an insurer can build a strong risk culture.
It has been more than two years since the new LAGIC requirements have been effective. Whilst insurers have put in place and/or improving the articulation of their risk appetite and risk management framework, the need to ensure that all levels of company staff understand and appreciate the requirements to manage risks in line with the company’s risk appetite remains as relevant as ever. Typically, managers, especially senior management, would have an in-depth understanding of the significant risks faced by the company and establish policies, procedures and processes to mitigate known risks within the stated risk appetite. However, the extent that these policies, procedures and processes are closely followed, especially by operational staff at the “coalface”, remains largely influenced by the risk culture of the company.
We will discuss various ways that we have seen to be effective in encouraging a healthier risk culture and ensuring there is greater focus on identifying, mitigating, and managing risks. This will help risk and actuarial functions to better understand and assess residual risks that are managed via capital requirements.
The Presentation is available here.
The Audio is available here.
About the presenters
Martin is a Director within the Financial Services Actuarial Consulting team. He has over 21 years’ experience in the financial services industry in Australia and Asia. He has been CFO, Chief Actuary and Appointed Actuary for a number of life insurers. Martin specialises in life insurance capital and solvency assessment as well as actuarial modelling efficiencies and design (especially in Prophet). He has a deep knowledge of ICAAP and LAGIC.
Daragh Brady works at Pacific Life Re in Sydney, and has over 10 years of experience in finance, actuarial and risk management functions. As the Head of Risk, he has many duties, including overall responsibility for the Internal Capital Adequacy Assessment Process (ICAAP), the Own Risk & Solvency Assessments (ORSA) and Economic Capital validation.