Victorian Managed Insurance Authority APCO Presentation – Risk Management in the VPS Jonathon Masom – Risk Management Adviser

Page 2 The VMIA  Statutory Authority - VMIA Act 1996  Captive insurance provider and risk management advisor for the State of Victoria  Provide risk management and insurance services to 4000 public and non government organisations in Victoria

Page 3 The VMIA: Mission & Vision  Vision “Victoria manages its risk, enhances its value and improves the quality of life for all Victorians.”  Mission “To take a leadership role in reducing Victoria’s total cost of risk.”

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Page 5 Snapshot- What we do?  Insure approximately $110 billion of client assets  Manage assets and liabilities in excess of $1 billion  Collect premium of over $200 million and pay claims  Train over 2500 people per annum  Review 60 agencies Risk frameworks per annum  Produce publications, tools and enablers  Support risk management initiatives across the State

Page 6 Key Drivers

Page 7 VMIA Business Model

Page 8 Statewide Risk Management  Run workshops, forums and scenario planning exercises on key risks to the state  Develop the Statewide Risk Register  Advise the Minister and the Government on statewide risks and key mitigation issues  Produce a bi annual risk report for the Minister on global, national and statewide risk and insurance trends and performance

Page 9 Primary Risk & Insurance Service Lines  Statewide Risk Management  Training & Education  Publications & Guidelines  Risk Management Services  Risk Management Partnership Program  Insurance Services

Page 10 Training & Education  Provide a risk and insurance training and education program to over 2500 VPS staff annually  Deliver key forums and events (round tables, leadership seminars etc)  Hold bi ennial Risk Leadership Conference and Risk and Insurance Forums  Facilitate risk and insurance networks across the State  Currently developing business case for “risk and insurance recognition/accreditation” program for the State

Page 11 Publications & Guidelines  Develop risk and insurance publications for clients across the state:  Riskybusiness  Risk insights and updates  Provide tools and guidelines such as:  Guide for Developing & implementing Risk Frameworks  BCM tools  Developing on line content over 2011

Page 12 Risk Management Services  Provide risk support services to targeted clients through 5 core risk streams:  Business continuity management  Project risk  Risk culture  Client assessments (RFQR, SRS, SERA)  Strategic & Emerging Risk  Deliver clinical risk management training, education and support to the health sector

Page 13 Risk Partnership Program  Risk Partnership Program supports risk mitigation and innovation across the state  Since 2001 has supported in excess of fifty projects with 14 projects currently underway  Cross divisional multi agency program

Page 14 Insurance Services  Provide insurance policies, programs and support to 4,000 clients  Deliver strategic insurance advice and reviews to clients  Progress leadership and application of the Total cost of Risk model  Provide the State with asset security through a global reinsurance program

Page 15 Risk Framework Quality Review (RFQR) The RFQR is a review of the quality, comprehensiveness and maturity of an organisation’s risk management framework.  In operation since 2006 and now in its third iteration  Benchmarks for exemplary performance progressively getting higher  Majority of clients have established substantive risk  Increasing emphasis on cultural aspects over form and function management frameworks

Page 16  Submission of supporting documentation  A review process completed by the VMIA  Interviews with Departmental secretaries/CEO’s, audit/risk committee chairpersons, risk managers  Provision of a client report  Audit Committee Presentations Comprises sections on governance, application of ISO31000, statewide, interagency and emerging risk and risk management outcomes and includes:

Page 17  Integrating Business Planning with Risk Management  Aligning Internal Audit or assurance activities & Risk Management  Moving from a compliance approach to risk to a cultural focus  Quality & Content of Risk Registers  Developing Key Risk Indicators  Supporting Business Continuity Planning  Improving Project Risk Management Practices Common Client Improvement Opportunities

Page 18 Organisations scoring in excess of 90% exhibited:  Commitment from Executive & Board  Integration of risk & corporate planning processes  Well defined governance framework  Strong reporting processes  Risk support systems, processes and infrastructure for managing risk  Clearly defined roles and responsibilities  Strong risk culture Characteristics of RFQR High Achievers

Page 19  Competing objectives: delivering more with less  Risk Compliance competes with Risk Culture  Public sector risk management expertise is improving but is not at the requisite organisational level  The public and private sector are becoming more connected requiring a whole-of-government approach to risk management  Attaining ERM maturity is a long road Public Sector ERM Challenges

Page 20 Key Principles of Risk Management Processes Time Stakeholder Value Chaos Silos Specialists Systemic Risk Mature Evolution of Risk Maturity Compliance Culture Operational Strategic

Page 21  Start with the basics and implement progressively  Delivering risk management within government is complex but the benefits are tangible  ERM must be driven from the top down & across the organisation and be supported by a strong risk management culture  VMIA see this as a cultural journey, focus on people & principles as much as the methodology  It is important to identify the value drivers of risk management as a key to success Key Lessons

Page 22 Thankyou Any Questions?