Monitoring

1. Strategic.

The Group Executive Committee regularly assesses key strategic risk scenarios for the Group as a whole, including scenarios for emerging risks and their strategic implications.

1. Insurance.

The Group closely monitors potential new emerging risk exposures. Zurich has an Emerging Risk Group, with cross-functional expertise to identify, assess and recommend actions for such risks on a Group level.

1. Market.

The Group regularly measures and manages market risk exposure. The Group Balance Sheet Committee reviews and recommends the Group’s capital allocation to market risk, while the Asset/Liability Management and Investment Committee reviews and monitors the Group’s strategic asset allocation and tactical boundaries and monitors the Group’s asset/liability exposure.

1. Credit.

The Group regularly tests and analyzes credit risk scenarios. Zurich can adjust the scenarios if market conditions warrant.

1. Liquidity.

The Group limits the percentage of the investment portfolio that is not readily realizable, and regularly monitors exposures to take action if necessary to maintain an appropriate level of asset liquidity.

The Group’s regular liquidity monitoring includes monthly reporting to the Group Finance and Risk Committee and executive management and quarterly reporting to the Board Risk Committee, covering aspects such as the Group’s actual and forecasted liquidity, possible adverse scenarios that could affect the Group’s liquidity and possible liquidity needs from the Group’s main subsidiaries, including under stressed conditions.

1. Operational.

The Group considers controls to be key instruments for monitoring and managing operational risk. Although primarily focused on important controls for financial reporting, internal control efforts also include related operational and compliance controls. Therefore, the Group continues to strengthen the consistency, documentation and assessment of internal controls for significant entities, processes and locations. Operational effectiveness of key controls is assessed in various ways, including self assessment, management validation and independent testing.

1. Reputation.

The Group centrally manages certain aspects of reputation risk, for example, communications, through functions with the appropriate expertise.

Date: 2015-02-16; view: 623