Risk management governance
The Board of Directors is responsible for the internal control of the Group, including approving business strategy and the Group’s annual business plan as well as determining risk appetite. The Group Executive Committee (‘GEC’) is charged by the Board of Directors for overseeing the risk management programme, including Enterprise Risk Management.
Responsibility for risk management is spread throughout the organisation. The chief executives of the Group’s underwriting hubs are responsible for developing and executing a strategy and business plan, subject to the approval of the GEC and the Board of Directors. The hub chief executives are responsible for identifying and managing the risks to the hub’s objectives.
The risk management programme is supervised by the Chief Risk Officer except for those issues which are part of the Group’s Enterprise Risk Management initiative which are the responsibility of the Head of Enterprise Risk Management. Both of these individuals provide guidance and support for risk management practices across the Group, including the underwriting hubs and various Group departments.
The Group’s Risk and Capital Committee – whose membership includes the Chief Risk Officer, the Head of Enterprise Risk Management and three members of the GEC – meets regularly and has the following terms of reference:
- propose risk governance policies and risk limits for GEC approval
- review and monitor key risk indicators against risk appetite
- oversee governance of internal risk and capital model
- consider short- and longer-term capital requirements and assumptions for GEC consideration
- monitor economic, regulatory and rating agency capital levels and changes in capital positions against targets
- monitor the asset/liability positions and liquidity profile of the Group and legal entities.
The Emerging Risk Working Group – whose membership includes underwriting, claims, investment, actuarial, risk and ERM representatives – is responsible for considering the potential impact of future issues that might emerge from changes to the external environment. The committee meets regularly and reports to the Group Risk and Capital Committee.