Risk Governance: A Framework to Support Better Decision-making and a Journey Towards Continuous Improvement

Jérôme Berset

Regulation is often seen as a necessary as a necessary evil; with Solvency II, European authorities impose a major set of new risk management requirements, both quantitative and qualitative, on a large majority of (re)insurance companies. Moreover, many regulators throughout the rest of the world adopt equivalent requirements. Under the so-called “Pillar II”, the Solvency II framework (as well as similar frameworks) includes a very comprehensive set of riskgovernance requirements.

Considering the implementation of the risk governance requirements as a compliance exercise will not make the best use of the millions of euros invested. Looked at differently – as a mindset rather than a box-ticking exercise – your investment will improve the risk culture of your company and give it more resilience and agility. The key question is what are the specific considerations that will allow your company’s risk governance framework to be more than a bundle of policies and charters establishing risk and control processes? Which are the smarter solutions that offer greater benefits for your company?

This chapter will review the essential components of a solid risk governance framework, as well as