Expertise > Risk Consulting > Enterprise Risk Management

Enterprise Risk Management

To be successful, a risk management program must encompass the following: 

• The methodologies used to measure risk must be practical and understandable by both senior management and frontline managers

• The program must produce actionable steps such as "accept a risk", "decline a risk", "reinsure the first $10 million at a price no higher than $5000" 

• The guiding motivation underlying suggested actions should be focused on what needs to be done to maximize shareholder value in the short and long term.

Lotter Actuarial Partners has developed a sophisticated set of tools and models based on these requirements. Our models are built upon the value-at-risk (VAR) and  risk-adjusted return on capital (RAROC) concepts that have gained enormous support in the banking industry and are rapidly gaining acceptance in the insurance industry.   

Our framework helps management answer fundamental questions such as:

• Does our company have the right capital structure for risks it has undertaken?

• Is the company adequately compensated for the risks that it undertakes?  

• How do we compare returns between departments that write different kinds of risks?

• Do we have enough, too much or the right kind of reinsurance?