Over the last several years, there have been well publicized industry incidents linked to costly failures which could have been, in part, prevented by stronger relationships between the Chief Risk Officer (CRO) and parts of the organization that assume risk. Following a survey of nine key insurers, the best practices that characterize a strong relationship between the CRO and the Chief Underwriting, or Product, Officer (CU/PO) were identified and are presented in the paper.

Many participants noted that the risk management function has evolved from a fairly small, limited, and detached role – just a few years ago – to a much stronger role with growing resources, allowing it to be further embedded in the business. Many CU/POs and other senior First Line individuals recognize the value of the risk management function – not least in providing comfort to CU/POs that decisions and processes have been adequately reviewed by an independent team.

While the conclusions in this paper are clearly focused on the underwriting function as a key risk taker, they can easily be expanded to other risk taking functions. For example, similar conclusions and best practices can apply between the CRO and the Chief Investment Officer (CIO), also a key risk taker in most organisations.

 

 

 

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