Ultimately, I acknowledge and offer this research project to Effat University students and the Effat University Library as a reference guide for their future projects. Research on planning for risk and the importance of having the knowledge and expertise to work with it to provide a meaningful gap analysis and improve the risk assessment process is drawn from secondary data.
Background Literature
What is ERM?
The Need of ERM
Problem Statement
While the study provides a broad overview of the reasons behind progress in enterprise risk management in companies, it leaves much room for further research into how enterprise risk management improves and protects shareholder value (Gordon, 2009) or what challenges companies face in business. implementation of risk management (Beasley, 2005). It has become clear from attempts to implement enterprise risk management that a better and complete understanding of the distribution of enterprise value is required.
Purpose Statement
One of the fundamental objectives of Enterprise Risk Management is to respond positively to shareholders' requests for stable and predictable income. The reputation of the risk management function and the active involvement of management is evaluated. This element evaluates the integrity of a company's risk management processes that address liquidity and funding risk.
Enterprise risk management has always been important (Olson and Wu, 2008) at the core of the insurance market, in the age of sailing ships, if not earlier. Enterprise risk management, as discussed, is a systematic and integrated approach to managing the overall risks, as a. Insurance risks and financial risks have been integrated under the concept of enterprise risk management as a formal part of the decision-making processes in companies.
The other key components of the framework take place in the context of these policies; based on an established structure that embeds enterprise risk management in organizational culture (Pagach and Warr, 2010). Although much consideration has been given to measures of tail risk such as value at risk, it has become clear from attempts to implement enterprise risk management that a full understanding of the distribution of firm value is required. Enterprise risk is included in the business strategy of a company that operates within the context of the uncertain environment.
Significance of Study
Research Question
Improving the ERM process in the organizations is suggested by involving top management teams in their risk assessment process through questionnaires. Some of the risks that a company is faced with are of a financial, dangerous, operational and strategic nature. The following are the profiles of the companies that have been selected for this research.
Liability to third parties covers accidents caused by the use of the vehicle within the limits set by the policy. To discuss this further, the findings of this study show that it is one of the most effective. This means that there is diversification between risk categories and that the value at risk of the entire company is thus less than the sum of the market.
If a company is listed on a stock exchange, the more closely the company's goals set by management are related to the interests of its shareholders, the closer the company's risk will be to the company's risk assessment on the stock exchange. To benefit positively from the above techniques (Lam, 2000), effective communication of strategy and structure is critical. First, managers proposing new projects should be asked to assess all major risks in the context of the projects' marginal impact on the firm's cumulative risk.
Research Objectives
Data and Methodology
Although the basic principles underlying enterprise risk management theory are well established, it should be clear that additional research is needed to assist in the implementation of enterprise risk management. This element looks at the level of operational risk management practices used, understood and used within the institution, especially during its decision-making process.
Outline of the Study
The strength of the relationship between a company's assets and liabilities and its management framework is weighted. In this section eight main features of the research are discussed: background literature, problem statement, statement of purpose, meaning of the research, research question, research objectives, data and methodology, and the main features of this research.
Introduction
Types of Risks
- Financial Risks
- Hazard Risks
- Operational Risks
- Strategic Risks
It typically addresses natural damage such as severe hot or cold weather, blizzards, tornadoes, hurricanes, pollution, fire, earthquakes, tsunamis, volcanic eruptions, torrential rain and floods, thunderstorms, lightning, and wildfires. Some risks relevant to an insurance-based business are negative media coverage, offensive advertising, budget overruns, customer demand seasonality and volatility, perceived quality, product/service development process, ethical violations, market share battles, attacks on brand loyalty, new.
The Concept of Enterprise Risk Management
How Business Plans Reduce Risk
Tools available to access risk that enable better informed management decision making are also addressed. A handful of these tools include balanced scorecards, multiple criteria analysis, simulation, data envelopment analysis, and financial risk models such as return on investment (ROI) and value at risk (VaR) analysis.
What is Value at Risk
How the Value at Risk Model Helps my Study
A dedicated team of competent professionals who have the expertise of handling all classes of insurance is one of Al Khaleej's strengths. Customizable and affordable Sharia-compliant healthcare is designed to address specific customer needs. However, shareholder risk can only be revealed indirectly, as it depends on how the stock market assesses the perceived riskiness of future corporate income streams from the company's ventures.
Second, to ensure that managers have an excellent assessment of the risk/reward trade-off, business unit cyclical performance assessments must take into account the contributions of each of the units to the company's overall risk. This means that there is a spread across risk categories and that the company-wide value-at-risk is therefore smaller than the sum of market risk, credit risk and operational risk value-at-risks. In this case, as can be seen above, most companies have managed to perform well in terms of securing returns on their investments.
To assess the correctness of the concept that ERM adopting companies better recognize and prioritize risk, the following is formulated. With social media influencing opinion worldwide, risks related to the company's products, services and reputation could be identified with the use of the internet and put into perspective through benchmarking. While the research provides a broad overview of the reasons behind ERM development in companies, it leaves much room for additional research into how enterprise risk management improves and protects shareholder value, and what challenges companies face in implementing ERM.
Previous Study
Difference between Islamic and Traditional Risk Management
The Importance of Enterprise Risk Management
Conclusion
Case Study Data
- A Glance at Qatar Islamic Insurance Company (QIIC), Qatar
- A Glance at Al Khaleej Takaful Group, Qatar
- A Glance at AMAN- Dubai Islamic Insurance and Reinsurance
- A Glance at SALAMA-Islamic Arab Insurance Company, Dubai
- A Glance at Al SAGR- Cooperative Insurance Company, Kingdom of
- A Glance at Gulf Union- Cooperative Insurance Company, Kingdom of
The papers obtained from the research and selection of the literature are classified and adapted to the scope by considering perspectives, such as secondary research, which is focused on the analysis of hypotheses or test models. Sheikh Abdulla Bin Mohamed Jabor Al Thani, the Chairman of the Board, provides strategic direction and effective leadership skills to help steer the company towards continued progress. Lifestyle offered the benefits of the Foundation Scheme as well as routine management of the chronic condition and extensive home nursing facilities.
Not only are you assured of the best treatment from the best doctors, but your diagnosis and subsequent medical care are also rigorously monitored by a team of experts around the world to detect mismanagement of treatment. It is now recognized by SAMA and has a paid-up capital of SR 220 million, making it one of the largest national insurers in the country and has a favorable business outlook.
Hypothesis
Because of the abundance of data on downgrades as opposed to defaults for A-rated firms, the distribution of changes in firm value corresponding to a decline can be estimated more precisely. In such cases, the company's book equity understates the buffer stock available to it that could be used to avoid default. If there were no insurance markets and no derivative markets, all the risks faced by an organization would be business risks as they arise as a consequence of the activities it undertakes.
As argued below, a well-designed enterprise risk management system ensures that all material risks are "owned" and that risk-return tradeoffs are thoroughly evaluated by operational managers and employees throughout the company. By adopting this perspective, enterprise risk management helps the company maintain access to the capital markets and other vital resources to implement its strategy and business plan.
DEA Value at Risk
Most Important Factors in Calculating VaR
Historical analysis suggests that the future will be like the past and that markets will behave similarly in the future. However, it is suggested that the relaxation of these predictions indicates that traditional modeling approaches do not readily accommodate transformations between a range of percentiles and holding periods.
VaR (Historical) and Current Analysis of Investment Return
Qatar
As for Qatar Islamic Insurance, there was a sharp decline in its return on equity during 2008 and 2009. Although there was a slight decline from 2010 and 2011, the company made significant progress from then until 2013. The average return in the nine-year run was 11.93% and 20.78% for Al Khaleej Takaful and Qatar Islamic Insurance, respectively.
United Arab Emirates
It managed to deliver some returns in 2012, but from 2014 to 2015, shareholders received barely any return on their investment. In 2009, it was able to provide some returns to shareholders, but in 2010, the performance was slightly lower. Between 2012 and 2014, the company managed to regain its position with a slight profit at around 4% returns.
Kingdom of Saudi Arabia
However, the company improved trading in 2012 and once again delivered a 5% return to its shareholders. This decline was then followed by 2015, which proved to be the company's most profitable year to date with a 10% return on investment.
The Average Return on the Investment in This Study
Al Khaleej Takaful in Qatar, AMAN in the UAE, and Al SAGR Co-Operative Co. Training should help officials better understand the nature of risk, and the legal and regulatory requirements on risk management.
Results of Research Undertaken
- Consideration of loss event data and event inventories data
- Brainstorming
- Questionnaires and surveys
- Interviews and self-assessment
- Facilitated workshops
- Use of Technology
A fact-based discussion can be initiated by looking into a database of key loss events for a particular industry prior to the brainstorming session. Finally, a risk management score can be determined after the risks to the unit have been identified and defined. The weaknesses considered in this analysis are mostly internal and involve the company's structure and culture.
An ERM site can be created on the intranet where employees can address their risk concerns. Focusing on the benefits of managing a particular risk can provide the most compelling evidence of how ERM creates value for the business.
Potential Obstacles
Recommendations for Future Study
Desheng Dash Wu & David Olson (2010) Enterprise Risk Management: A DEA VaR Approach to Supplier Selection, International Journal of Production Research.
