2. 2
The Chief Risk Officer
Question: What are the marching orders of the Chief
Risk Officer?
Answer: Use caution to enhance, not impede, progress!
Source: Fortune Cookie
3. 3
Why is Risk Management Important?
• Generate stable (increasing) earnings
• Desire for earnings that are accurate, predictable, and explainable
• Ensure that product risks are adequately priced, including cost of
embedded risks
• Avoid major surprises
• Ensure risk that creates excess volatility to earnings or capital are
appropriately hedged, reinsured and provided for
• Find opportunities to take risks that meet criteria and provide
appropriate rewards
• Take advantage of opportunities that exist at the company-wide
level to employ internal hedges
• Find opportunities to optimize regulatory capital
• Defensive strengths – Offensive competitive advantages
