Lockton Companies International Limited. Authorised and regulated by the Financial Services Authority. A Lloyd’s Broker. Insurance Practitioners’ Association Istanbul Conference 30 th September – 1 st October 2010

Transportation Presentation Date Lessons from Implementing an ERM Programme Speaker - Ian Canham

2 No single approach to ERM implementation  Process must have  Business focus  Add to existing business process  Cultural fit to organisation

3 Business Focus  Must be aligned to Commercial business not an academic undertaking  Communication must be simple to understand and allow action  Benefit must be seen by individual managers, who must implement outcomes  Owned by management facilitated by Risk Manager

4 Additive to Current Process  Utilise current management information not new system  Language and measurement must be same and delivered in same way as other management reports ie financial, safety, operational  Output must be the basis for risk management decisions across the group - must be a tool

5 Must Fit Culturally  If centralised organisation must be the same  Must flex with the organisation to create required behaviours  This is a continual improvement process/give up small victories

6 Tools  Risk workshop  Risk radar  Reporting

7 Ideas for Risk Workshop  Intro and war stories  Outline of strategic objectives  Risk categories and definitions – agree framework for the future  Risk appetite – agree high level tolerance matrix  Risk identification and assessment – group and regional/business  Risk treatment - Controls – Acceptance – Insurance  Ownership, reporting framework, role of the audit committee  Role of risk review from specialists – e.g. internal audit, legal, compliance, HS&E etc

8 Risk Maps - EPS example

9 What not to do  Off the shelf process  Forcing process on the business  Demanding exact measurement

10 ERM and Insurance  ERM outcome should be basis for the insurance process  Insurers will support a well managed company and this provides management and risk judgement

11 Why Risk Managers should implement ERM “Inability to be on the same wavelength as senior management is a common mistake, Risk managers careers often come to an end due to communication not competence problems”