Page 86 - RISK Management IC86 Ebook
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Risk Management
n determining organizational structure, and
n establishing corporate culture and values.
5. Decision-making
n In order to make sound and effective decisions, senior
managers need sufficient information. When making business
decisions, risk adjusted return plays an important role. Senior
managers need to evaluate business opportunities based on
not only total returns, but also the risks associated with them,
i.e., risk adjusted return.
6. Policyholder as a stakeholder
n Stakeholders include any group or individual that supports
and participates in the survival and success of a company. In
the case of an insurance company, individual policyholders
are an important stakeholder. With an ERM infrastructure in
place, the insurance company can improve the risk
transparency to regulators, rating agencies and equity analysts.
Policyholders, as a stakeholder, will have confidence in the
company's ability to meet future'obligations and are less likely
to lapse.
Organizational objectives for pursuing erm
1. Competitive advantage
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