16.6 ERA 1.3 Enterprise Risk Modeling Overview

Goal: understand and quantify the relationships among the risks to the business that arise from asset, liabilities and underwriting

• All are affected by internal decisions & external factors

Modeling can help with management functions and strategic decisions:

• Determining capital need (to support risk, maintain rating, etc)

• Identifying sources of significant risk and cost of capital to support them

• Setting reinsurance strategies

• Planning growth

• Managing asset mix

• Valuing companies for M&A