What a CERA knows about ERM

Learning/Skills Goals – 1

A CERA-holder will have a thorough understanding of

  • the concept of ERM
  • the drivers behind ERM – governance, regulation, improvements in understanding of risk and techniques for measuring and managing risk, enterprise value protection and creation etc
  • practical aspects of ERM, including all elements of a robust risk management framework and its operation, and critical success factors
  • standards and good practice in use around the world
  • the different types of risk – financial, insurance, operational, and strategic
  • the quantification of risk, including tools and techniques and supporting mathematics
  • practices and techniques for the management of risk, including control, mitigation, transfer, avoidance, and exploitation of risk opportunities
  • the economic value added by sound ERM
  • important regulation and regulatory capital requirements

 

Learning/Skills Goals – 2

For the risks that can currently be modelled effectively, a CERA-holder should be proficient at the following tasks:

  • Independently develop reasonable models to quantify risk by type & in aggregate
  • Parameterise the models appropriately
  • understand when historical data is applicable
  • know when and how to apply current values
  • Be able to apply informed judgment
  • Run the models to obtain relevant results
  • be able to focus on the key metrics
  • select appropriate number of iterations
  • be able to update the model as necessary
  • Explain the models and the results to a variety of audiences, other technical ERM experts, managers of specific types of risk, individuals such as the CFO, CEO and board members

 

Learning/Skills Goals – 3

In addition, a global CERA-holder should be able to do the following:

  • Implement the basic steps in the risk management process for any individual type of risk and in aggregate
  • Recognise how corporate governance issues can affect risk management within an organisation, including organisation structure and remuneration incentives to accept or control risk
  • Use the standard methods for reporting risk to boards and senior management
  • Calculate regulatory capital requirements for insurers and banks
  • Understand how rating agencies incorporate risk management in determining ratings
  • Implement and explain economic capital models within an organisation

Find out more about the CERA credential and the CERA Global Association