Risk Management for Insurers
First published:
ISBN: 9781782722229
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Management Control
Management Control
Introduction
Risk Management
Financial Economics of Insurance
Underwriting Risks: Life Risk and Non-life Risk
Investment Risks: Market, Credit and Liquidity Risk
Non-financial Risks: Operational and Business Risk
The Financial Crisis: Consequences for Insurers
Insurance Supervision: From Solvency I to Solvency II
Insurance Supervision Outside the EU
Pillar I of Solvency II
Pillar II of Solvency II
Pillar III of Solvency II
Accounting Regulations
Banking Supervision: From Basel I to III
Management Control
Organising Risk Management
Bringing All the Strands Together
It is the objective of management of an organisation to influence its members in such a way that the objectives of the organisation are reached. This is called management control. For financial institutions, developments in the field of management control are closely related to the developments in the field of risk management and economic capital, as described in the previous chapters. This chapter discusses the concepts of management control, and performance measurements such as embedded value, RAROC and capital allocation. Based on a consecutive series of examples, this chapter will specifically discuss how these concepts can be applied in the area of management control.
WHAT IS MANAGEMENT CONTROL?
Management control is defined as the process by which managers influence other members of the organisation to implement the organisation’s strategy. An example of this control is the yearly establishment of budgets. On this basis, some business units can grow and others will have to cut back. In order to control, management needs information on the state of affairs within the organisation. Managers need to know to what extent the objectives of the organisation are being achieved
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