How Safe Is Safe Enough
How safe is safe enough?
An introduction to risk management
By Angela Darlington, Simon Grout & John Whitworth
Presented to The Staple Inn Actuarial Society At Staple Inn Hall At 6 p.m. On 12 June 2001
Contents
Section
1 2 3 4 5 6 7 8 9
Page
Introduction.................................................................................................................. 1 Why is risk interesting? ................................................................................................ 2 Types of risk ................................................................................................................ 4 Risk perception .......................................................................................................... 10 Traditional risk management...................................................................................... 14 Risk analysis methods ............................................................................................... 17 Basel Capital Accord ................................................................................................. 24 Enterprise risk management ...................................................................................... 26 How can actuaries add value? ................................................................................... 32
Appendices
A B The FSA and risk management References
How Safe Is Safe Enough? To Risk Management
1
Introduction
"One of the common denominators I have found is that expectations rise above that which is expected." George W Bush, US President 1.1 1.2 As we are sure is the experience of most writers of SIAS papers, we found it very easy to volunteer but extremely difficult to get around to actually writing it. Initially, we planned to write a paper on e-commerce - a hot topic causing great interest and debate at the time that we booked this session. However, by the time we got round to writing the paper, the
An introduction to risk management
By Angela Darlington, Simon Grout & John Whitworth
Presented to The Staple Inn Actuarial Society At Staple Inn Hall At 6 p.m. On 12 June 2001
Contents
Section
1 2 3 4 5 6 7 8 9
Page
Introduction.................................................................................................................. 1 Why is risk interesting? ................................................................................................ 2 Types of risk ................................................................................................................ 4 Risk perception .......................................................................................................... 10 Traditional risk management...................................................................................... 14 Risk analysis methods ............................................................................................... 17 Basel Capital Accord ................................................................................................. 24 Enterprise risk management ...................................................................................... 26 How can actuaries add value? ................................................................................... 32
Appendices
A B The FSA and risk management References
How Safe Is Safe Enough? To Risk Management
1
Introduction
"One of the common denominators I have found is that expectations rise above that which is expected." George W Bush, US President 1.1 1.2 As we are sure is the experience of most writers of SIAS papers, we found it very easy to volunteer but extremely difficult to get around to actually writing it. Initially, we planned to write a paper on e-commerce - a hot topic causing great interest and debate at the time that we booked this session. However, by the time we got round to writing the paper, the