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Actuarial Science Assessment

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Management
School
YMCA Institute of Science and Engineering
Type
Worksheet
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Running head: ASSESSMENT 1
Assessment
Student's Name
Institutional Affiliation

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ASSESSMENT 2
QUESTION 11.
a. Why should WP implement an ERM process?
ERM supports the efficient use of resources- Before the implementation of the ERM process,
a lot of different individuals are associated with a haphazard risk management strategy which
is, in most cases ineffective. Consequently, with ERM, WP is capable of improving its tools
and framework adopted for consistent day to day risk management. Therefore, ERM
eliminates redundancy and improves efficiency as it enhances the allocation of the right
amount of resources towards risk mitigation.
ERM enhances the effective coordination of both compliance and regulatory issues- An
effective ERM process enhances a seamless integration of regulatory examiners, financial
auditors, and bond rating agencies. Therefore, as ERM data is associated with the
identification, monitoring, and mitigation efforts, its use would assist in the reduction of the
cost and efforts associated with reviews and audits.
ERM promotes an improved risk focus, and risk perspective- ERM establishes important
indicators to assist in the detection of a potential risk event by offering an early warning. The
vital measurements and metrics of risk are further ideal towards the improvement of
reporting and analysis to identify any likelihood of potential risk. This situation allows WP to
change their risk profile whenever the potential of risk occurrence is relatively high. Unlike
traditional risk strategies whose focus was limited to risk acceptance, avoidance, or
mitigation, ERM practices encourage a more comprehensive approach where risk evaluation
is considered an opportunity to increase competitiveness within the market and also explore
new markets and ideal operational conditions.
b. What are the benefits to WP’s major stakeholders (The Peace family, WP’s other
employees, wholesale distributors, business partners, creditors, and customers)?
Customers will experience improved operational effectiveness and efficiencies as ERM
improves risk mitigation. ERM improves WP’s risk situation leading to improvements in
operations hence providing improved decision-making, a situation that could credibly lower
the cost of production hence reduce price while improving quality.
The Peace Family, among all other stakeholders, would realize improved compliance with all
reporting, legal, and regulatory requirements. Such a scenario would improve the
organizational confidence regarding the achievement of its strategic objectives, effectively
improving the business perspective for all stakeholders. For instance, WP’s employees,
distributors, creditors, customers, and other business partners would experience an optimal
business environment where risk mitigation among other risk control strategies enhance
prompt response towards risk.
c. Who will be responsible for the ERM process?
The Chief Risk Officer is responsible for the ERM process, and hence this position should be
created for WP. Their role also incorporates the integration of a credible reporting structure,
collaboration, the communication and analysis of the value of enterprise risk management
(ERM) to all major stakeholders. Consequently, a CRO’s key role would be to integrate risk
management as a vital component of the corporate culture.

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Running head: ASSESSMENT 1 Assessment Student's Name Institutional Affiliation ASSESSMENT 2 QUESTION 11. a. Why should WP implement an ERM process? • ERM supports the efficient use of resources- Before the implementation of the ERM process, a lot of different individuals are associated with a haphazard risk management strategy which is, in most cases ineffective. Consequently, with ERM, WP is capable of improving its tools and framework adopted for consistent day to day risk management. Therefore, ERM eliminates redundancy and improves efficiency as it enhances the allocation of the right amount of resources towards risk mitigation. • ERM enhances the effective coordination of both compliance and regulatory issues- An effective ERM process enhances a seamless integration of regulatory examiners, financial auditors, and bond rating agencies. Therefore, as ERM data is associated with the identification, monitoring, and mitigation efforts, its use would assist in the reduction of the cost and efforts associated with reviews and audits. • ERM promotes an improved risk focus, and risk perspective- ERM establishes important indicators to assist in the detection of a potential risk event by offering an early warning. The vital measurements and metrics of risk are further ideal towards the improvement of reporting and analysis to identify any likelihood of potential risk. This situation allows WP to change their risk profile whenever the potential of risk occurrence ...
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