1. Enterprise Risk Management
Scott Moss, CIS P/C Trust Director
Maryam Z. Sherkat, MIABC Legal Counsel & Risk Officer
Mayor Teunis Westbroek, MIABC Board Chair

2. 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

3. What We Are Not Talking About
Not a class in ERM details
Selling ERM
Capital Modeling ERM
Solvency II
Own Risk Solvency Assessment (ORSA)

4. ERM Frameworks RIMS Maturity Model UK & Australia standards of ERM
COSO
ISO (CIS follows this model)

5. ERM Framework Establish the internal and external context
Risk assessment
Risk treatment
Monitor results
Communicate and consult with internal and external stakeholders

6. 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

7. CIS ERM Efforts Organizational Wide Assessment Decision Making
Capital Modeling Using ERM
ERM Tools for Members

8. Risk Register & Ranking
Governance
Operational
Public Image
Compliance
Technology
Hazard
Human Resource
Financial
Business Model
Political
Competition
Underwriting
Reserving/Claims
Reinsurance

9. Risk Map Financial Business Model Political Competition Underwriting
Reserving/Claims
Reinsurance

10. 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

11. 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

12. 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

13. Challenges Cutting edge for pools in US
Not required by auditors or regulators
Results are unclear

14. Outcome Improvements
Enhance skills to make decisions with opportunities and threats.
Formal risk owners and risk mitigation plans.
Better monitoring of risks with early warning flags, benchmarks, and dashboards.

15. Why is the MIABC involved in ERM?
Initially, because it was required by our regulator

16. Risk is an expense – focus is on reducing cost of risk
Evolution of Risk Management
Traditional Risk
Management
Advanced Risk
Management
Enterprise-wide
Risk Management
Risk is uncertainty –
focus is on optimizing
risk to achieve goals
Risk is bad – focus is
on transferring risk
Risk is an expense – focus is
on reducing cost of risk

17. MIABC ERM Process

18. MIABC ERM Framework

19. MIABC Working Groups

20. MIABC Mitigation Plans

21. 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.

22. MIABC Strategic Plan

23. 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.

24. Benefits
Evolved approach to be more proactive with respect to risk management.
Identified areas of concern that needed to be addressed.
Enhanced focus of resources and efforts.

25. Benefits Encouraged cross-departmental interaction and cooperation.
Identified risks of not undertaking certain activities and initiatives.

26. 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

27. Contact Information
Maryam Z. Sherkat
MIABC Legal Counsel & Risk Officer
Scott Moss
CIS P/C Trust Director