A Top Down & Bottom Up Strategic Approach to ERM. Marcus Evans 5 th Annual ERM Conference. Jennifer McCallister March 20, 2012. Speaker Overview. Kentucky native
Marcus Evans 5th Annual ERM Conference
March 20, 2012
Humana is a leading health care company that offers a wide range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being.
Internal Audit Consulting Group
Final Deliverable: Report with risks identified by the business, analysis of risks, and mitigation strategies to optimize the risks.
Annual Strategy Sessions
Annual Audit Planning
Risks Identified by ERMC
ERMC & AC
Risks Identified by the Business
Risks Identified by Internal Audit
Executive & Operating Committee Risk & Strategy Discussions
Understanding the risk factors leads to making the right decisions.
Risk Appetite Objectives:
Are current mitigation efforts adequate to manage the risks within the risk appetite? Yes/No?
Risk Optimization Target: 1/2/3/4/5
Internal Audit Validation/Opinion
Risk Optimization: The determination of the appropriate level of mitigation and monitoring necessary to manage the risk within the risk appetite of the organization.
UnmanagedAwareness of the risk is absent or the risk is not being addressed.
Ad HocMitigation of the risk is sporadic and not tied to a shared risk appetite.
Management of the risk is underway and tied to a shared risk appetite vision. Validation of mitigation efforts by independent party.
Data is available and used to explain the risk appetite which has been reviewed with senior management and the Board.
The risk appetite is quantitatively developed and includes a scenario and sensitivity analysis.
How quickly a risk can create a material loss or missed opportunity.
Performed at the business process, segment, or product level
IMPACT FACTOR RANGE
MITIGATION FACTOR RANGE
WELL MANAGED – SOMEWHAT MANAGED – NOT MANAGED
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Jennifer McCallister, MBA, CRMA
Consulting Leader| Internal Audit Consulting Group
101 S. 5th St., Ste. 900 | Louisville, KY, 40202