CHP 24: Risk Governance

Question 1

List 7 perceived benefits of risk management to the provider

Answer 1

SAMOSAS

Stability and quality of business improved
Avoid surprised
Management and allocation of capital improved
Opportunities exploited for profit
Synergies identified (and related opportunities taken)
Arbitrage opportunities identified
Stakeholders in the business given confidence

Question 2

Benefits of enterprise risk management

Answer 2

Diversification, including being able to identify undiversified areas of risk
Pooling of risks
Economies of scale in terms of the risk management process
Capital efficiency as capital can be better targeted
Providing insight into risk in different parts of the business
Understanding risks to add value by exploiting risk as an opp