Introduction to CERA Insert name Insert date Introduction What is Enterprise Risk Management CERA Global Association CERA Syllabus V alue of CERA CERA in practice 16 November 2018 2 What is Enterprise Risk Management ERM ID: 808722
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Chartered/Certified Enterprise Risk Actuary/Analyst
Introduction to CERA
Insert name
Insert date
Slide2IntroductionWhat is Enterprise Risk Management?CERA Global AssociationCERA Syllabus
Value of CERACERA in practice16 November 20182
Slide3What is Enterprise Risk Management (ERM)?There are many different definitions.“Enterprise risk management is a process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achieve of entity objectives.”
COSO Enterprise Risk Management – Integrated Framework Executive Summary 200416 November 20183
Slide4Characteristics of ERMHolisticAll risksIntegrated
Full process / risk management cycleUpside as well as downside managementAny type of organisation16 November 20184
Slide5One credential based on mastery of one set of learning objectives, with accreditation applied on a consistent basis worldwide. No other credential comprehensively meets the global needs in risk management.
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Slide6Dublin Statement (Oct 2007)Single, global, uniform, high-quality, qualification
In-depth practitioner qualificationDefine syllabus “from the ground up”Enhance and promote the brand of the actuarial professionPosition the profession to take a leading role in risk management globallyPosition the profession in EU for Solvency IIImplement it all - effectively and convincingly
Take early practical steps towards a truly global profession
SOA launching first version of CERA but working to support/evaluate global
project.
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Slide7Tallinn (May 2009)Syllabus/Learning Objectives - work completeGroupe
Consultatif (EU) & IAA supportive17 associations “Interested/Active” < half have English as main national languageImplementation & Name – still evolving.16 November 20187
Slide814 Actuarial associations signed a Treaty in Hyderabad, India on 13 November 2009 globalizing the SOA
qualification.16 November 20188
Slide9CERA Global Association (CGA)Creation of a g
lobal credentialStandardisation of ‘ERM toolkit’Standardisation of educationSpread of ERM skills for actuariesInternational mobilityInternational recognitionGlobalisation of the risk
profession
Supporting members of actuarial societies specialising in ERM
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Slide10The CGA…Grants actuarial organisations the right to award the global CERA credential to actuaries who have satisfied the requisite education and training requirements set out in the CERA Global Treaty
Is dedicated to promoting and administering the CERA credential worldwideHas 26 Treaty member associations20 of which have been granted power to award the CERA credential16 November 201810
Slide11CGA objectivesto enhance the brand of the actuarial profession globallyto define and promote a uniform and valuable credential
that is: based on a defined syllabus and achievement levelsconsistent with modern, effective methodologiessupported by high-quality education and materialsissued locally, in many languagesrecognised and portable internationallysubject to educational quality control
… by the global actuarial profession
to be of value for members of the profession who wish to specialise in ERM
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Slide12CERA around the world16 November 2018
Canada USA (CAS and SOA) France UK Denmark Netherlands Sweden Switzerland South Africa Israel India Germany Taiwan Australia Japan Finland
Austria
Spain
Catalonia
Italy Belgium Croatia
Slovenia
Mexico Norway Ireland Greece
Portugal
Award Signatory
Acceding party
Interested in joining
Party to the Treaty
Slide13CERA credentialRigorous curriculum, combining actuarial science with the theoretical, practical and professional principles of ERM
Common syllabus, administered locally (in own language)Recognised and portable internationallyApplies both qualitative and quantitative insight to ERMInstils the highest professional
standards
Equips
risk management professionals to empower better business decisions
Accreditation awarded and maintained through strong quality assurance process
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Slide14CERA syllabusERM concept and frameworkERM process
Risk categories and identificationRisk modelling and aggregation of risksRisk measuresRisk management tools and techniquesCapital managementApplies to any type of organisation: financial or non-financial16 November 2018
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Slide15CERA syllabus: ERM frameworkBest practice ERM framework and structure within an organisation:Importance of governance, culture and behavioural aspects
Centralised risk function and role of Chief Risk Officer (CRO)Link to strategic aimsRisk frameworks in regulatory environments (global)The role of regulators and credit agencies in the evaluation of risk management functionsRelevance of ERM to all other stakeholders16 November 201815
Slide16CERA syllabus: ERM processDetermination of risk appetiteRisk capacity, risk profile, risk tolerance, risk limitsThe overall risk management process / cycle
Different definitions and concepts of riskRisk taxonomyIdentification of risksUnderstanding contagionCase studies16 November 201816
Slide17CERA syllabus: all risks coveredFor example:Financial
: stock market, economic, interest rate, foreign exchange, basis, credit, liquidity, insurance, basisOperational: catastrophe, counterparty, people, process, technological (including cyber), project, model, parameterBusiness / external: customer demand, environmental, legal, regulatory, political, agency, reputational, conduct, strategic, moral hazard, demographic16 November 201817
Slide18CERA syllabus: quantitative methodsRisk measures and their propertiesAnalysis of quantitative data
Model selectionMethods of risk aggregation, including:Correlation-based approachesCopulasTail distributions and tail dependenciesExtreme value theory16 November 201818
Slide19CERA syllabus: ERM modellingQuantifiable v. non-quantifiable risksBest practice use of models in the overall ERM decision-making processModel risk and parameter risk
Assessment and analysis of different types of riskMarket, credit, insurance, operational, liquidity etcDevelopment of an economic capital modelTechniques for allocation of capital across an organisation16 November 201819
Slide20CERA syllabus: risk management tools and techniquesRisk optimisationResponses to risk
Recommendation of risk mitigation approachesWith transfer / without transferPractical considerationsBalancing benefits against constraintsTools and techniques for managing different types of riskResidual risks16 November 201820
Slide21Value of CERACERAs are trained through a rigorous multi-year examination process to identify, measure and manage risks and opportunities within complex enterprisesCERAs make confident decisions related to complex financial challenges affecting business, by applying qualitative and quantitative insights to risk management
CERAs add value to ERM through their rigorous training, making them equipped to provide a full overview of an organisation’s risk profileAs actuaries, CERAs are bound by a code of professional conduct to act with integrity, care and competence16 November 201821
Slide22Value of CERA (contd)Assess and manage the entire risk spectrum of an organisation, including financial, operational and strategic risksWell-qualified for a range of risk management positions such as risk analyst, risk manager, Chief
Risk OfficerCan contribute within a broad range of fields, including:
Life insurance
General insurance
Banking
Asset management
Pension funds
Other financial services
Technology
Consulting
Energy
Transportation
Healthcare
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Slide23Where do actuaries work in ERM?Chief Risk Officers (CROs) / Senior Risk OfficersOperational / Group risk managers
Rating agenciesDeveloping ERM review frameworksPerforming ERM capability assessmentsConsultants developing ERM capabilities in companiesIncluding integration of pension scheme risks16 November 201823
Slide24Where do actuaries work in ERM? (contd)Risk modelling & research
Risk-based capital assessment techniquesAlternative Risk Transfer (ART)Project appraisal and risk management:Energy companiesEngineering / constructionTransport / aviationBanking / corporate finance
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Slide25CERA: the numbers*
16 November 201825*correct November 2018
Slide26CERA holders by award signatory
Australia 420
Austria 5
Canada 19
Denmark 3
Finland 1
France 195
Germany 196
India 2
Israel 7
Japan 68
Netherlands
46
South
Africa 116
Sweden 6
Switzerland 17
Taiwan 1
UK 837
USA –
CAS 153
USA – SOA 2,645
TOTAL
4,737
Correct November 2018
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Slide27To find out more, please visitwww.ceraglobal.org16 November 2018
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Slide28Any questions?Visit: www.ceraglobal.org
Email: CERA.Global@actuaries.org.ukThe views expressed in this presentation are those of the presenter and do not necessarily reflect the views of the CERA Global Association.
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