WIN Magazine - Fall 2017 - 35

level(s) for the risk and identify controls
or monitoring activities that mitigate or
eliminate the risk. If there are remediation issues that need to be addressed,
these also need to be identified. The key
risk owner also has the responsibility
for communicating the status of the risk
quarterly to the ERM Committee and the
Finance and Risk Committee.

MEASURE ENTERPRISE RISK
USING A CAPITAL MODEL
The third component of an ERM framework is to determine that the company
has an adequate current and prospective
level of capital to achieve its long-term
strategic goals. A company will need
to access an economic capital model in
order to quantify and correlate all of its
risks into a single mathematical model.
Therefore, this component of the ERM
framework adds a level of complexity in
which most wholesale insurance brokers
and managing general agents will need
assistance from a third party.

Most companies that embark on
implementing an ERM framework,
postpone investing in economic
capital models until they begin
to realize the benefits of the first
two components of an ERM  framework. In the interim, companies will
develop internal balance-sheet and
operating-statement  forecasts  for
the  following three calendar years
using a "base" set of financial assumptions. A company will then "stress" their
level of capital by modeling possible loss
outcomes should one or more of their
key risks occur.

ERM SPELLS BETTER
PERFORMANCE
There are many benefits to implementing an ERM framework. While
most published insurance literature
is focused on insurance companies, I
believe that wholesale insurance brokers and managing general agencies
could also benefit from implementation of an ERM process. In addition
to improving the level of EBITDA and
operating performance, companies will
sharpen their operating practices and
develop additional metrics to monitor
their performance.
●

Joseph F. Morris, CPA, MBA, has over 37 years of insurance-industry
experience. Mr. Morris is President of P&C Insurance Company
Strategies, LLC, a consulting company based in Fort Washington,
Pennsylvania, that provides business and financial services for
property and casualty insurance companies with a specialization
in assisting companies in developing and implementing an
enterprise risk-management framework. He can be reached at 215-901-0334 or
jmorris@pcicStrategies.com.

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Table of Contents for the Digital Edition of WIN Magazine - Fall 2017

Do Hurricanes Have a Silver Lining?
Underwriting Marijuana
The Cyber Insurance Conundrum
Writing Data Security Into Law
Gauging Risk, Reaping Reward
Simply Seamless
Moving to the Cloud: 3 Migration Strategy Models and the 6 R’s.
In the WIN-NER’s Circle
WIN Magazine - Fall 2017 - Intro
WIN Magazine - Fall 2017 - bellyband1
WIN Magazine - Fall 2017 - bellyband2
WIN Magazine - Fall 2017 - cover1
WIN Magazine - Fall 2017 - cover2
WIN Magazine - Fall 2017 - 3
WIN Magazine - Fall 2017 - 4
WIN Magazine - Fall 2017 - 5
WIN Magazine - Fall 2017 - 6
WIN Magazine - Fall 2017 - 7
WIN Magazine - Fall 2017 - 8
WIN Magazine - Fall 2017 - 9
WIN Magazine - Fall 2017 - 10
WIN Magazine - Fall 2017 - 11
WIN Magazine - Fall 2017 - Do Hurricanes Have a Silver Lining?
WIN Magazine - Fall 2017 - 13
WIN Magazine - Fall 2017 - 14
WIN Magazine - Fall 2017 - 15
WIN Magazine - Fall 2017 - 16
WIN Magazine - Fall 2017 - Underwriting Marijuana
WIN Magazine - Fall 2017 - 18
WIN Magazine - Fall 2017 - 19
WIN Magazine - Fall 2017 - 20
WIN Magazine - Fall 2017 - 21
WIN Magazine - Fall 2017 - 22
WIN Magazine - Fall 2017 - 23
WIN Magazine - Fall 2017 - The Cyber Insurance Conundrum
WIN Magazine - Fall 2017 - 25
WIN Magazine - Fall 2017 - Writing Data Security Into Law
WIN Magazine - Fall 2017 - 27
WIN Magazine - Fall 2017 - 28
WIN Magazine - Fall 2017 - 29
WIN Magazine - Fall 2017 - 30
WIN Magazine - Fall 2017 - Gauging Risk, Reaping Reward
WIN Magazine - Fall 2017 - 32
WIN Magazine - Fall 2017 - 33
WIN Magazine - Fall 2017 - 34
WIN Magazine - Fall 2017 - 35
WIN Magazine - Fall 2017 - Simply Seamless
WIN Magazine - Fall 2017 - 37
WIN Magazine - Fall 2017 - Moving to the Cloud: 3 Migration Strategy Models and the 6 R’s.
WIN Magazine - Fall 2017 - 39
WIN Magazine - Fall 2017 - In the WIN-NER’s Circle
WIN Magazine - Fall 2017 - 41
WIN Magazine - Fall 2017 - 42
WIN Magazine - Fall 2017 - cover3
WIN Magazine - Fall 2017 - cover4
WIN Magazine - Fall 2017 - outsert1
WIN Magazine - Fall 2017 - outsert2
WIN Magazine - Fall 2017 - outsert3
WIN Magazine - Fall 2017 - outsert4
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