Enterprise Risk Management
Scott Moss, CIS P/C Trust Director
Maryam Z. Sherkat, MIABC Legal Counsel &
Risk Officer
Mayor Teunis Westbroek, MIABC Board Chair
Outline
 ERM Frameworks
 Why CIS is Involved in ERM
 CIS ERM Efforts
 Risk Register and Ranking
 Risk Map
 CIS ERM Next Steps
 DART
 Challenges
 Outcome Improvements
What We Are Not Talking About
 Not a class in ERM details
 Selling ERM
 Capital Modeling ERM
‒ Solvency II
‒ Own Risk Solvency Assessment (ORSA)
ERM Frameworks
 RIMS Maturity Model
 UK & Australia standards of ERM
 COSO
 ISO 31000 (CIS follows this model)
ERM Framework
1. Establish the internal
and external context
2. Risk assessment
3. Risk treatment
4. Monitor results
5. Communicate and
consult with internal and
external stakeholders
Why Is CIS Involved in ERM?
 Be an example for members
 Good management
 Framework for decisions
 Explicitly address uncertainty
 Desire to continually improve
 Destined to be the future of risk
management
CIS ERM Efforts
1. Organizational Wide Assessment
2. Decision Making
3. Capital Modeling Using ERM
4. ERM Tools for Members
Risk Register & Ranking







Governance
Operational
Public Image
Compliance
Technology
Hazard
Human
Resource







Financial
Business Model
Political
Competition
Underwriting
Reserving/Claims
Reinsurance
Risk Map
CIS Risk Map
6
Financial
Business Model
Political
Competition
Underwriting
Reserving/Claims
Reinsurance
Likelihood/Frequency
5
Competition
Reinsurance
4
Economic
Finance
Reserving
3
Underwriting
Political
Public Image
2
Bus. Model
1
Governance
0
0
1
2
Impact/Severity
3
4
5
6
CIS ERM Continuing
1. Assign “Risk
Owners”
2. Develop Mitigation
Plans for each risk
3. Establish “Early
Warning Indicators”,
Benchmarks, and
Dashboards for each
risk
4. Using ERM
Decision Model in
major decision
Decision Assist Risk Tools (DARTs)
Member-focused ERM services and tools:
 ERM Framework
 ERM Consulting
 Executive Risk Management Team
 Sample Risk Registers
 Sample Risk Mitigation Plans
 Sample Monitoring
Challenges
 Definition of ERM not consistent
 Does ERM “fit” in public sector?
 Board understanding value
 Members not having the resources or
desire to practice ERM
Challenges
 Cutting edge for pools in US
 Not required by auditors or regulators
 Results are unclear
Outcome Improvements
1. Enhance skills to make decisions with
opportunities and threats.
2. Formal risk owners and risk mitigation
plans.
3. Better monitoring of risks with early
warning flags, benchmarks, and
dashboards.
Why is the MIABC involved in ERM?
Initially, because it was
required by our
regulator
Evolution of Risk Management
Traditional Risk
Management
Risk is bad – focus is
on transferring risk
Advanced Risk
Management
Risk is an expense – focus is
on reducing cost of risk
Enterprise-wide
Risk Management
Risk is uncertainty –
focus is on optimizing
risk to achieve goals
MIABC ERM Process
MIABC ERM Framework
MIABC Working Groups
MIABC Mitigation Plans
Board’s Role in the ERM Program
 Board has ultimate responsibility for overseeing the
MIABC’s risk profile.
 The MIABC’s management team oversees the
ERM program.
 Risks are to be managed within the Board’s risk
parameters, expressed as a “Risk Appetite
Statement” (RAS).
 The RAS is the organization’s overarching attitude
towards risk-taking.
MIABC Strategic Plan
Challenges
 Commitment to and understanding of ERM
both at Staff and Board level.
 After initial progress, momentum slowed.
 Quantifying risk rating and measuring
progress.
 Continued monitoring and assessment.
Benefits
 Evolved approach to be more proactive
with respect to risk management and
identifying risks of not taking certain risks.
 Identified areas of concern and the order
in which we needed to focus our
resources and efforts.
 Encouraged cross-departmental
interaction and cooperation.
Closing
“Risk management needs to be
interwoven into all aspects of a firm’s
business and should be a part of the
calculus of all decision-making.”
— Dr. Randall S. Kroszner
Governor, Federal Reserve Board
Contact Information
Scott Moss
CIS P/C Trust Director
[email protected]
503-763-3800
Maryam Z. Sherkat
MIABC Legal Counsel &
Risk Officer
[email protected]
604-449-6356