Enterprise Risk Management Presentation to the International Insurance Society

1
Enterprise Risk ManagementPresentation to the
International Insurance Society

• Greg Case
• CEO, Aon Corporation

July 2006
2
Risk Advice offers compelling leverage
U.S. Example

• Risk identification / assessment
• Program design
• Program placement
• Claims advocacy
• Safety engineering
• Technology solutions
• Treaty facultative reinsurance

Trillions
275B
25B
Source Aon Corporation estimates
3
We have the technology
Assess
Design
Implement
Risk Financing
Risk Measurement
Capital Allocation
ERM Design
Risk Identification
Business Continuity
Value Capture
Crisis Management
Employee Selection
Plan
Hedging
Gap Analysis
Supplier Management
Lobbying
Safety Security
Measurement, Data / IT Support
4
We have the technologybut is it plugged in?
Assess
Design
Implement
Risk Financing
Risk Measurement
Capital Allocation
ERM Design
Risk Identification
Business Continuity
Value Capture
Crisis Management
Employee Selection
Plan
Hedging
Gap Analysis
Supplier Management
Lobbying
Safety Security
Measurement, Data / IT Support
5
Risk Prioritization Map (Illustrative)
Risk Heat Map Does Not Equal Action
Often not insurable risks
High
3
13
17
Hiring/Retention Communications Risk
1
4
1
2
Supply Chain Resource Allocation
3
16
6
4
Performance Gap Regulatory
5
6
10
Employee Absence Product Development
7
14
12
8
18
Severity
8
IT Infrastructure Competitor Risk
9
19
9
10
5
11
Currency Loss of Property / Use
11
12
2
Image Risk Post Merger Integration
7
15
13
14
Fraud Environmental
15
16
Customer Needs Political Shareholder Relations
17
Low
18
0
1
19
Probability
6
Playing not to lose
Value Preservation
Avoid
Transfer
Retain
Mitigate
7
Playing not to loseversus playing to win
Value Preservation
Value Creation
Avoid
Transfer
Leverage

Retain
Mitigate
8
Lessons Learned CEO List

• Diagnostics / models are essential but table
  steaks
• Data / inputs are critical to the model
• Broad based ownership is required
• Monetize the potential
• Plan for a continuum, not an event

9
Enterprise Risk ManagementPresentation to the
International Insurance Society

• Greg Case
• CEO, Aon Corporation

July 2006