Waste Pool

Cavern

Canyon

Burial Chambers

Risk Identification Tools

1. SWOT-Strength Weakness Opprotunites Threats

2. Risk Checklist
3. Risk Prompt List- PESTELI
4. Risk Taxsonomy
5. Risk Trigger Questions
6. Case Study
7. Risk Focus Process Analysis

Risk Identification Techniques

1. Brainstorm
2. Independent Group Analysis
3. Survey
4. Gap Analysis
5. Delphi Technique
6. Interview
7. Working Group

Risk Categories

1. Market and Economic

2. Interest Rate
3. Foreign Exchange
4. Credit
5. Liquidity
6. Systemic
7. Demographic
8. Non-life Insurance
9. Operational
 10. Residual

Model Validation

1. Design and build are consistent with intended purpose

2. Model validation is an independent process
3. Establish an owner of model validation
4. Ensure appropriateness of model governance
5. Model validation should be proportional to materiality/complexity
6. Validate the model components
7. Address the limitations of model validation
8. Document the model validation

Goals of Measuring Operational Risk

1. Strategic risk control optimization

2. Strategic risk reward optimization
3. Analyze principal-agent risk
4. Estimate regulatory and economic capital

Coherent Risk Measure

1. Subadditivity (add two risks together at least equal amount of risk)

2. Monotonicity (Higher return portfolios lower risk)
3. Positive Homogeneity (Double portfolio double risk)
4. Translation invariance (adding cash decreases risk by that amount)

Response to Risk

a. Reduce (Netting, Diversification benefit)

b. Remove (Avoid project)
c. Transfer (Reinsurance, Hedging)
d. Accept (self insurance)

Assumption Setting Process

1. Determine Assumptions in Scope

2. Inventory Current Assumptions
3. Set Assumptions using current experience
4. Develop Governance process
ORSA- Own Risk and Solvency Assessment

1. Allocate Board responsibility

2. Facilitate own risk assessment
3. Facilitate own solvency assessment
4. Ensure an appropriate forward-looking perspective
5. Be used as a key management information tool
6. Enhance internal and supervisory understanding
7. Provide a group-wide assessment
8. Ensure a continuous process
9. Ensure adequate documentation