Enterprise Risk Management in India - The IRM India

 The goal of Enterprise Risk Management in India (ERM) is to eliminate the isolated approach to identifying, controlling and managing risk practices across the organization. By applying a consistent approach to ERM policies and procedures through a clearly defined organizational risk hierarchy, organizations can mitigate risks and identify new business opportunities.

Insurers have a long history of using risk management strategies. However, as their business models become more complex and their geographic reach expands, many large insurers are working to identify risk dependencies within the organization. Risk management is not only important for the largest companies; Even small and medium-sized insurers have to take a risk-centric approach to their organizations. From a financial perspective, ERM promotes the efficient allocation of capital to increase profitability and shareholder value.

Financial risk is just one step in the chair - if the insurer cannot identify and integrate risk areas throughout the business, the ERM will fail. Corporate ratings are an important indicator of an insurer's financial health for investors, consumers and regulators. And so, ERM adoption accelerated as rating agencies began rating insurance companies based on their ERM capabilities. Standard & Poor's, one of five independent agencies that evaluate the financial strength of life insurance companies, published ERM rating guidelines in 2005 and began rating ERMs as part of the rating process in early 2008.

It is at the insurer's discretion to shape the insurer's ERM initiatives and policies. Credit rating agencies do not evaluate insurers against an organization's risk structure, only whether their risk management functions are performing appropriately. ERM practices vary widely by insurer's geographic scope and industry. Credit rating agencies expect insurers to identify the most critical elements of risk affecting a wide range of businesses across credit, market, underwriting, operational and strategic risk categories.