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Oversight, guidance

and transparency

Risk Management as a boardroom issue

Raj Singh | MultaQa Qatar 2010 | 8 March 2010


Agenda

An independent risk function plays a

critical strategic role

BoD and BoD Risk Committee oversee risktaking

activities

BoD guides risk taking by setting high-level

risk policy

The BoD requires transparency of the risks

of the group

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

2


Independent risk

function plays a

critical strategic role

Raj Singh | MultaQa Qatar 2010 | 8 March 2010 3


Risk Management has a broad and

significant mandate

…an independent, influential team of respected risk and

actuarial professionals, accountable for ensuring the

financial strength (capital, solvency and reserves) and

reputation of the Group – even through extreme scenarios

…by providing rigorous risk analytics and thoughtful

recommendations to support controlled risk taking and by

shaping the risk landscape, in order to instil a risk-aware

culture throughout the organization

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

4


A comprehensive approach to Risk

Management covers three key areas

Three Pillars of Risk Management

Quantitative risk

management

Risk governance

Risk Disclosure

Sound valuation and risk

measurement

Quantitative risk limit

monitoring system

Reliable capital adequacy

framework

Clearly defined

responsibilities for risk

taking and risk mgmt

Sound, documented:

– risk mgmt policies

– operating, reporting,

limit monitoring, and

control procedures

Financial and risk

disclosure, incl.

information on tail risk

and scenarios

Company risk culture

Peer reviews

Regulatory compliance

Internal and external

audits of processes and

figures

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

5


Risk plays a central role in the strategic

steering of the company

Group risk policy and tolerance

Capital cost allocation

(factual)

Reporting of impact on

capital adequacy

Limit monitoring

Accumulation control

Decisionmaking

Portfolioand

performance

measurement

Strategy

Capital

allocation

Capital cost allocation

(projected)

Large transaction

approval

Part of all decision taking bodies

concerned with risk taking

Target

setting

Risk model input into

optimisation

Testing of risk tolerance

criteria

Derivation of limit framework

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

6


An independent Risk function is a

critical aspect of proper governance

Group Internal Audit

Board of Directors

Chief Executive Officer

Stefan Lippe

Chief Financial Officer

George Quinn

Chief Risk Officer

Raj Singh

Risk Management Units

Property &

Casualty Risk

and Actuarial

Mgmt

Life & Health

Risk and

Actuarial

Mgmt

Financial

Risk Mgmt

Business

Risk Review

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

Regulatory Affairs

Security Office

Sustainability & Emerging Risks

Group Risks

& Analytics

Operational

Risk &

Control

Mgmt

7


BoD and BoD Risk

Committee oversee

risk-taking activities

Raj Singh | MultaQa Qatar 2010 | 8 March 2010 8


BoD involvement part of an overall

governance structure

Risk Management

Definition of CAR framework

Economic capital modelling

Limit framework

Risk reporting

Group Risk &

Capital Co.

BoD

Finance &

Risk Co.

Executive Committee

Business

Asset Liability

Co.

Group Products

& Limits Co.

Economic Value Management

Definition of EVM framework

Economic income reporting

Risk adjusted performance

Planning

Finance function

Balance Sheet Management

All capital views

Solo and consolidated view

Operational execution

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

9


Finance and Risk Committee has BoD

oversight of Risk

The FRC meets quarterly and reviews:

– Group Risk Policy (and recommends to the BoD for approval)

– risk and capacity limits and their usage

– risk control framework

– important risk exposures in all major risk categories

– new products and strategic expansions

– critical principles used in internal risk measurement, valuation, capital

adequacy assessment and economic performance management

– capital adequacy

– Treasury function

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

10


BoD guides risk

taking by setting

high-level risk policy

Raj Singh | MultaQa Qatar 2010 | 8 March 2010 11


Group Risk Policy, which defines risk

culture, is owned by the BoD

Risk culture

Risk strategy

Risk management principles

Risk attitude

Controlled risk taking

define basic areas of risk taking

Risk tolerance

limit risk to ensure continued operations

following extreme loss event

clearly specified risk policy and risk

control framework

Clear accountability

individuals held accountable for decisions

Risk appetite

Independent risk controlling function

create shareholder value by optimizing

risk-reward balance

avoid conflicts of interest

Open risk culture

risk transparency at all levels

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

12


Risk tolerance, defined by the BoD,

drives capital and liquidity

considerations

Swiss Re risk tolerance:

“To be able to continue to operate following an extreme loss event.”

“Extreme loss event”:

100 year annual aggregate Group loss

Do we hold enough capital (survival)?

Can we meet all our obligations as they fall

due (operation)?

Regulatory

capital

Rating

capital

Internal

capital

Liquidity stress test

Capital adequacy requirements Related liquidity risk

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

13


The BoD requires

transparency of the

risks of the group

Raj Singh | MultaQa Qatar 2010 | 8 March 2010 14


Risk must regularly inform and

influence the BoD on key risk issues

Risks made transparent through regular reporting to the BoD

Key reporting considerations

Act as a translator, putting the

issues in language management

can understand

Mitigation status:

/ /

Impact:

Low/Medium/High

Issue: XYZ

Assessment: ABC

Actions taken: ABC

Recommendation: ABC

Interpret the data

Supply recommendations and

follow-up on them

Use reports as a starting point

for discussion

Provide context for sensitivities

and scenarios

Mitigation status:

/ /

Impact:

Low/Medium/High

Mitigation status:

/ /

Impact:

Low/Medium/High

Issue: XYZ

Assessment: ABC

Actions taken: ABC

Recommendation: ABC

Issue: XYZ

Assessment: ABC

Actions taken: ABC

Recommendation: ABC

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

15


A partnership.

The BoD and Risk Management work

together to oversee, guide and

provide transparency of all the

risk-taking activities of the group

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

16


Questions?

Raj Singh | MultaQa Qatar 2010 | 8 March 2010 17


Basic Copyright Notice & Disclaimer for Swiss Re

Presentations provided to External Parties

©2009 Swiss Re. All rights reserved. You are not permitted to create any

modifications or derivatives of this presentation without the prior written

permission of Swiss Re.

This presentation is for information purposes only and contains non-binding

indications as well as personal judgment. It does not contain any

recommendation, advice, solicitation, offer or commitment to effect any

transaction or to conclude any legal act. Any opinions or views expressed are

of the author and do not necessarily represent those of Swiss Re. Swiss Re

makes no warranties or representations as to this presentation’s accuracy,

completeness, timeliness or suitability for a particular purpose. Anyone shall at

its own risk interpret and employ this presentation without relying on it in

isolation.

In no event will Swiss Re or one of its affiliates be liable for any loss or

damages of any kind, including any direct, indirect or consequential damages,

arising out of or in connection with the use of this presentation.

Raj Singh | MultaQa Qatar 2010 | 8 March 2010

18

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