|Targeted News Service|
As Enterprise Risk Management (ERM) has grown from buzzword to corporate must-have, the Chief Risk Officer, or CRO, has emerged as an important corporate position.
At insurers and other financial firms, actuaries commonly fill the CRO role. And the job is growing in complexity while rising in prominence, as three risk officers pointed out at the
Most major insurers have a CRO in their senior management team, and even in these uncertain financial times, their offices are growing, Matson said. Companies new to ERM are figuring out how to structure a program while regulators worldwide are hoping to use a company's ERM program to help them monitor the company's financial strength.
Not all companies design their ERM programs the same way. At CNA, Verheyen said, he works with approximately 20 people in three core areas:
* Risk and capital modeling, in which a team of people develop computer models that help determine how much capital each business area requires. This knowledge helps the company determine whether an area's profits justify the amount of capital it needs. The group also helps in evaluating reinsurance purchasing.
* A catastrophe modeling group which builds tools for use by each business area to better assess and price for catastrophe risk.
* A core risk management and purchasing group, which performs more traditional risk management functions, such as helping CNA purchase its own workers' compensation insurance.
Within Zurich, the work is organized by segment - life insurance, general (property-casualty) insurance, group operations and a separate function for
All this enjoys significant support from company executives and boards of directors, the CROs agreed. It helps businesses take intelligent risks, Franklin said.
As the C-suite learns to depend on ERM, regulators are following suit. By 2015, the
The panel generally welcomed the regulators' approach - trying to avoid making the