Page 61 - Continental Reinsurance 2022 Annual Report
P. 61
Risk Management Statement 59
Therefore, we have established clear roles and responsibilities Financial Risk
for risk oversight, assessment, and mitigation, ensuring that Continental Reinsurance operates in dynamic financial
risk management is embedded throughout the Group. We markets and manages investment portfolios to optimize
promote a risk-aware culture. returns. These activities are affected by global economic and
financial market volatility. Fluctuations in interest rates,
We strive to foster and promote a risk-aware culture that exchange rates, and investment market conditions impact on
encourages proactive identification, assessment, and our investment portfolios and profitability. Therefore, close
reporting of risks, by providing regular training and education monitoring of global economic trends and adjustment of
programs, encouraging open communication, and investment strategies accordingly is necessary to optimize
recognizing and rewarding risk management efforts. returns.
We also actively assess risk management maturity within the Continental Reinsurance employs prudent investment
African industry and strive to promote best practices in risk strategies, diversification, and risk limits to manage market
management throughout the industry by collaborating with risk effectively.
industry stakeholders, participating in industry forums, and
sharing our knowledge and expertise to enhance risk We closely monitor market trends, interest rates, foreign
management capabilities across the African reinsurance exchange rates, and other relevant factors to inform our
sector. investment decisions. Our risk management framework
includes regular review and assessment of investment
Current Risks Managed performance to ensure alignment with our risk appetite.
The risks that currently impact on our business and
stakeholders include but are not limited to regulatory and We seek to manage exposure to credit risks which stem from
compliance, insurance, financial, operational, and strategic our reinsurance and investment activities by employing
risks. However, we consider these to be the most pertinent to rigorous credit assessment procedures, including
our operations and thus, seek to effectively manage them. counterparty due diligence, credit limits, and monitoring of
credit exposures.
Regulatory and Compliance Risk
We recognize the importance of adhering to regulatory We maintain a diversified portfolio of counterparties and
requirements and maintaining compliance with applicable regularly review their creditworthiness. Our risk management
laws and regulations across the jurisdictions in which we framework includes ongoing monitoring and proactive
operate. Therefore, we actively monitor changes in regulatory management of credit risk to minimize potential losses.
landscapes and assesses the potential impact on our
operations in various jurisdictions. Operational Risk
We recognize that operational risks can arise from various
We have implemented robust compliance programs and sources, including internal processes, technology, human
internal controls to mitigate regulatory and compliance risks. error, and external events. Therefore, at Continental
We engage with regulators and industry bodies to stay Reinsurance, we have implemented robust operational risk
informed and to contribute to the development of effective management practices, including strong internal controls,
risk management practices. business continuity planning, and regular assessments of
operational vulnerabilities. We promote a culture of
Insurance Risk continuous improvement and learning to identify and
At Continental Reinsurance, insurance risk is inherent in our mitigate operational risks effectively.
business and as such, we employ rigorous underwriting
practices, including risk assessment, pricing, and portfolio Strategic Risk
diversification, to manage insurance risk effectively. Continental Reinsurance Company operates in a dynamic and
competitive industry. We actively assess and manage strategic
We continuously monitor and assess our exposure to risks that may impact our long-term objectives and business
catastrophic events, claims experience, and emerging trends model. Our risk management framework includes regular
to ensure that our risk appetite aligns with our business strategic reviews, scenario planning, and stress testing to
objectives. Our risk management framework is continuously evaluate the potential impact of external factors on our
improving in maturity and scope, to include stress testing and strategic goals. We remain agile and adaptable to address
scenario analysis to evaluate the potential impact of adverse emerging opportunities and challenges.
events on our underwriting portfolio.
