The Chief Risk Officer supports the Board of Directors, the Managing Director and Senior Management in the assessment of the adequacy and effectiveness of the risk management system, pointing out any weaknesses or shortcomings and identifying recommendations for their removal, and the methodology and methods used, especially with regard to the current and prospective internal assessment of the risk and the solvency, to monitor the risks.
The risk management system is the set of processes and instruments used to support the risk management strategy of the Unipol Group, and provides an adequate understanding of the nature and materiality of the risks to which the Insurance Company are exposed. The risk management system means that it can have a single standpoint and take a holistic approach to risk management, and forms an integral part of the business management.
The Risk Department is responsible for continuously identifying, measuring, assessing and monitoring the current and prospective risks at individual and aggregate level that the Insurance Company is or could be exposed to and the related inter-dependence in the risk management system.
The risk management system as a whole is described in the set of Group policies and specifically in the “Risk management policies”, the “Current and prospective risk assessment policies”, the “operational risk management policies” and the “Concentration of risks at group level policies”; an integral part of the risk management system is also the policies that set out the principles and guidelines on (i) management of specific risk factors, (ii) management of a risk in a specific process, (iii) risk mitigation, and (iv) management of the risk measurement models.
In the exercise of its role, the Risk Department is in charge of the design, implementation, development and maintenance of the risk measurement and control system. Among these, the definition and use of instruments aimed at evaluating the capital needed to face the risks identified is of particular importance, and it is known as the Internal Model. The responsibility for the design and implementation of the Internal Model is separate from the responsibility for validating it in the Insurance Company.
The Risk Department also helps towards promoting a risk culture across the entire Group.