Enterprise risk management

Enterprise risk management (ERM) is generally accepted to be a wider subject than traditional risk management. While traditional risk management focuses on identifying, measuring and monitoring risks to limit a company's losses, ERM recognises that businesses take risks to make a profit for their owners. It therefore attempts to strike a balance between too much risk and not enough risk in light of a business's strategy - making sure the risk-taking activities of the company are aligned with its objectives and its willingness, or otherwise, to take losses. An ERM process will incorporate risk information into strategic planning, management decision making, product design and more.

The value that actuaries can bring to risk management, working alongside other professionals, is well understood, both inside and outside the financial services arena. The depth of actuarial training means that actuaries are well placed to assess and manage individual types of risk (e.g. market, credit, liquidity, operational, insurance, pensions, group, process, strategic, reputational risks, etc.). The breadth of actuarial training also positions actuaries as a natural source of expertise for ‘enterprise’ risk management. This aspect of risk management involves the holistic assessment and management of the different risk exposures that an organisation might face.

In addition to bringing a professional ethos and wider financial services training, actuaries who wish to specialise can obtain the Chartered Enterprise Risk Actuary (CERA) qualification, a globally recognised demonstration of ERM expertise. For further information visit the CERA website.

The new ERM Strategy which was approved by the Profession's Council in November 2011:  Initial roadmap will be showcased at the Risk and Investment Conference, taking place in Leeds, 27-29 June 2012.