The main principles applied to the whole Group aimed at ensuring a sound defense
against all the risks that could arise from its business activities, are defined
within the “Internal Control and Risk Management System” and the “Risk Management
Policy” adopted by the Board of Directors. In particular, the “Risk Management
Policy” details principles, strategies and processes aimed at identifying, evaluating
and monitoring risks.
The Risk Management System relies on the following building blocks:
- risk governance: to establish an effective risk management organizational structure based on clear
definition of risk roles and responsibilities and on a set of Policies and Guidelines;
- risk management process: to allow the ongoing identification, assessment, addressing, taking, monitoring
and reporting of all risks
- business support: to promote and spread the risk management culture, through shared values, with
the aim of rising the efficiency of the risk management system, ensuring also
value creation for shareholders. All risk factors present in the ordinary business
activity are considered in management decisions: a risk based approach is applied
by each Group company to capital management, reinsurance, asset allocation and
new products development processes, in order to optimize, also through risk adjusted
metrics, the risk-return optimization and the capital allocation.
The risk management process is developed on an ongoing basis involving, with
different roles and responsibilities, the Board of Directors, the Top Management
and the organizational structures both at Group and Company level.
The risk management process allows the ongoing identification, evaluation and management of all risks, taking into account the changes in the nature and
size of business, and in the market environment. This process is developed in
the following phases:
- Risk identification and evaluation methodology definition: to define suitable principles and quantitatively or qualitatively methodologies
to identify, classify and evaluate risks. The main risks the Company is exposed to are identified and classified in the
Group Risk Map.
- Risk strategy: to define the Company risk attitude and assign, on a consistent and integrated
basis, risk targets and operating limits to the Operating Units.
Group risk strategy is internally defined and consistently developed to support the Generali Group
mission and defined strategic targets. The risk management strategies adopted
by the Group companies are defined in coherence with those stated at Group level
to support the mission and the strategic objectives. Risk strategy is formalized by a set of quantitative and qualitative statements that outlines
the Group risk attitude articulated in a hierarchical principles based structure
that aims to an adequate and coherent implementation of strategies approved by
the Board of Directors, even in the subsidiaries.
Consistently with Solvency II and rating agencies view, these principles regard:
- Risk profile;
- Risk preference;
- Risk attitude (risk appetite and risk tolerance);
- Operating limits.
- Risk management: to deal with all the activities concerning new risks taking and existing risk
management. Risk taking and risk management activities are regulated by specific
Policies, which define principles and/or operating limits in order to maintain
a risk profile aligned with the Company risk attitude.
- Reporting: to develop effective reporting on the Company risk profile and risk exposures,
both for internal and external stakeholders and to supervisory authorities.
The Risk Management function oversees the whole risk management system in order to support the Operating
Units, the Senior Management and the Board of Directors.
Details on the Risk Management System including risk assessment and latest developments
are included in the Group Risk Report 2011, which is available in a dedicated
section of the yearly financial statements of Generali Group and in the online report