Page 27 - The Insurance Times December 2024

Sustainable Development Goals (SDGs): Insights into Re(insurance) sector around the globe, as a regulator it
how the reinsurance sector is addressing sustainability would have been better if there would be session like Regu-
and resilience in the face of climate change. Learning latory Technology (Reg Tech): Cyber Risk Management,
from global experiences could help shape regulatory Understanding Regulatory Innovations and discussion on
approaches that promote sustainable practices within Regulatory Challenges faced by developing countries from
the local market. regulatory perspective.

7. Inspiration for Future Policies Overall, attending the #20SIRC as a regulator from Nepal
was a transformative experience, offering invaluable insights
Actionable Strategies: The knowledge and insights
into the global reinsurance landscape. The knowledge gained
gained from the conference inspire actionable strate- about innovation; technological advancements would be
gies for improving reinsurance sector.
critical in shaping Nepal's reinsurance framework in days to
Stakeholder Engagement: Learning about effective come. This experience would not only enhance my under-
stakeholder engagement strategies used by insurers and standing of the industry but also empower me to drive
reinsurance industry, fostering a collaborative environ- meaningful change and improvement within Nepal's regu-
ment that supports growth and innovation. latory environment, ensuring that it is well-equipped to
adapt to the evolving challenges and opportunities in the
Besides gaining some insightful revolution taking place in reinsurance sector.

Glossary of Technical Terms Related to Risk Management

1. Risk Appetite Definition: Shifting the financial burden of a risk to
Definition: The amount and type of risk an organi- another party, often through insurance or con-
zation is willing to accept in pursuit of its objectives. tracts.
Example: A company with a high-risk appetite may Example: Purchasing insurance to transfer the risk
invest in volatile markets to achieve higher returns. of property damage.
2. Residual Risk 7. Key Risk Indicator (KRI)
Definition: The level of risk remaining after imple- Definition: A measurable value used to monitor
menting risk mitigation strategies or controls. changes in risk exposure.
Example: Even after installing fire alarms, there is Example: An increase in overdue payments can be
residual risk of fire damage. a KRI for credit risk.
3. Risk Mitigation 8. Scenario Analysis
Definition: Strategies and actions taken to reduce Definition: A process of analyzing potential future
the likelihood or impact of identified risks. events by considering alternative possible out-
comes.
Example: Diversifying investments to mitigate fi-
nancial risks. Example: Evaluating the financial impact of a natu-
ral disaster under different severity scenarios.
4. Enterprise Risk Management (ERM)
9. Risk Register
Definition: A holistic approach to identifying, as-
sessing, and managing risks across an entire orga- Definition: A document or system that records all
nization. identified risks, their assessments, and mitigation
plans.
Example: ERM integrates risk management into Example: A company’s risk register includes risks
strategic planning and operational processes.
like supplier delays and IT outages.
5. Operational Risk 10. Control Self-Assessment (CSA)
Definition: The risk of loss due to failed internal
processes, systems, people, or external events. Definition: A process in which managers and staff
evaluate the effectiveness of risk management and
Example: A data breach caused by weak control processes.
cybersecurity is an operational risk.
Example: A financial team conducts a CSA to en-
6. Risk Transfer sure compliance with regulatory requirements.

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