Chapter 4 Flashcards
what is traditional risk management?
risk evaluated in “silo” way
what are the “pure” risks for traditional risk management?
property
business interruption
liability
personnel
what does the ERM program consider?
considers all risks an organization faces across the entire enterprise
what has a holistic/ interconnected view of risk?
ERM Program
what type of program is headed by Chief Risk Officer and used in large organizations?
ERM Program
what are the types of risk within ERM?
- hazard (pure) risk
- operational risk
- financial risk
- strategic risk
what risk management techniques are used to treat hazard risks?
- loss prevention / loss reduction
- retention
- non insurance risk transfer
-insurance
what are operational risks?
risks arising from day to day business operations
what are some examples of operational risk?
cybersecurity
supply chain
interruption of utilities
what is financial risk?
risks arising from changing conditions within financial markets
is strategic risk internal or external?
external
what type of risk must you be in position to respond?
strategic
what are the ERM tools?
risk score
risk register
risk map
what are the advantages of the ERM program?
- increase awareness and assessment of risk
- integrated response to the full range of risks
- alignment with organization’s risk tolerance and its strategies
- fewer operational surprises and losses
- greater compliance with regulatory and legal requirements
- improved accountability and efficiency
what are the barriers to an ERM program?
- dynamic; always changing
- lack of commitment from senior leadership
- resistance to change/ turf war
- communication
