Thank you for sharing!

Your article was successfully shared with the contacts you provided.

S&P initiated a great deal of the activity around enterprise risk management (ERM) when it announced that it was going to specifically rate insurers’ ERM functions and that those ratings would influence insurers’ credit and financial-strength ratings. At the time, S&P offered specific ERM criteria from a variety of perspectives, one of which was termed strategic risk management (SRM). 

The word “strategic” is much used, but implicit in most uses is the act of investment: allocating capital to a given product or line of business that is intended to generate a profitable return. The foundation of corporate investment is the business plan, which frequently contains a detailed description of the proposed investment, as well as pro forma results. Because a pro forma is a forecast and the future could develop unfavorably, some level of risk adjustment to that forecast is necessary. There are a number of ways to accomplish this—one of which is through a model.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.


  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?



Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.