• Order
  • SAU
  • Offers
  • Support
    • Due to unforeseen circumstances, our phone line will be unavailable from 5pm to 9pm GMT on Thursday, 28th March. Please be assured that orders will continue to be processed as usual during this period. For any queries, you can still contact us through your customer portal, where our team will be ready to assist you.

      March 28, 2024

  • Sign In

Disclaimer: This is an example of a student written assignment.
Click here for sample essays written by our professional writers.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

How can enterprise risk management lead to sustainable profit and growth?

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 408 words Published: 12th Jun 2020

Reference this

Question

How can enterprise risk management lead to sustainable profit and growth?

Answer

Risk management is described as an essential function of insurance companies, but in order to deliver better value to customers organisations have recognised the importance of adopting more innovative approaches. In this way, the emergence of enterprise risk management (ERM) has been identified as a flexible system used for managing various complex risks in enterprises irrespective of certain sources and nature (Fraser and Simkins, 2016). In applying ERM to the insurance field, organisations are focused on ensuring a structured method to assess the risk-return ratio in decision-making processes. It has been argued that ERM can lead to sustainable profit and growth of insurance companies, considering the extensive value creation under the respective model to handling organisational risks. The precise way through which ERM creates sustainable value and profit to organisations is to enable senior management to quantify and maintain the risk-return tradeoff pertaining to the entire company (Oliva, 2016). From this perspective, introducing value based management appears a viable option, considering the emphasis on prioritising decisions within organisations. The exploration of how risk is defined is important in drawing further conclusions related to the sustainable profit and growth resulting from ERM implementation. In financial terms, any capital market incident that can directly impact the cost of capital of the company is recognised as risk. In this way, the outcomes provided under the ERM framework should be properly incorporated into insurance companies’ business strategies (Fraser and Simkins, 2016). Creating extensive shareholder value has become the ultimate concern for managers implementing the ERM model. Such a framework contributes to the controlled and balanced manner in which insurance companies handle different risks. The economic value added under the respective framework serves as a significant indicator of the benefits of ERM from both financial and sustainable perspectives (Oliva, 2016).

References

Fraser, J. R. Simkins, B. J. (2016). The challenges of and solutions for implementing enterprise risk management. Business Horizons. 59(6) 689-698. Oliva, F. L. (2016). A maturity model for enterprise risk management. International Journal of Production Economics. 173(1) 66-79.

 

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this assignment and no longer wish to have your work published on UKEssays.com then please: