GROUP TAKES STEPS TO MITIGATE RISK
A leading financial institution has taken proactive measures to manage risk and ensure the integrity of its operations. In a move to boost transparency and accountability, the Group has implemented robust risk management practices across various aspects of its business.
Implementing Robust Risk Management Practices
The Group’s Treasury department has been granted trading limits by the Board, with day-to-day operations overseen by the Group Treasurer. This ensures that risks arising from fluctuating currency exchange rates and interest rates are effectively managed within predetermined limits.
Key Areas of Focus
- Market risk: monitored daily by independent risk managers who report weekly to relevant stakeholders, including the Chief Executive Officer.
- Operational risk: mitigated through adequate segregation of duties in dealing, confirmation, settlement, and risk exposure measurement.
- Counterparty risk: managed through trading limits and other measures.
Underwriting Risk Management
The Group has implemented a proactive approach to underwriting risk management. The company’s statutory valuator performs regular investigations into actual mortality and morbidity experience, with best-estimate assumptions adjusted accordingly. All mortality and morbidity risks above a certain retention limit are reinsured, while applications for cover are evaluated against strict underwriting criteria.
Internal Audit Function
The internal audit function of the Group plays a crucial role in monitoring risk management practices. The internal auditor performs an independent appraisal activity, examining and evaluating the company’s activities, resultant business risks, and systems of internal control. Any significant control weaknesses are brought to the attention of management and the Audit Committee for remedial action.
Annual Review
The Group reported that no material breakdown in internal controls or systems has occurred at the Group level during the year under review. The directors are responsible for maintaining an adequate system of internal control, which reduces but cannot eliminate the possibility of fraud and error.
Commitment to Ethical Standards
The company’s commitment to ethical standards is evident in its requirement for all employees to maintain the highest ethical standards. With a vested interest in the accuracy and integrity of financial statements, shareholders, depositors, policyholders, and regulatory authorities can rest assured that the Group’s business practices are beyond reproach.
Risk Management Practices
- Trading limits approved by the Board
- Day-to-day operations overseen by the Group Treasurer
- Market risk monitored daily by independent risk managers
- Counterparty risk managed through trading limits
- Underwriting risk mitigated through reinsurance and strict underwriting criteria
- Internal audit function monitors risk management practices
- Directors responsible for maintaining an adequate system of internal control