Most organisations have the technical aspects in place, some more developed than others, however many still struggle to gain value from these activities.  Barnett Waddingham has developed its own risk maturity model against which it can benchmark clients’ risk management practices proportionate to their size, complexity and risk exposures.  We understand how to apply best practice risk techniques and seek to evidence whether softer elements of risk culture are in place, to pass a ‘use test’.

Scenario analysis, stress-testing, and reverse-stress testing

There are also several actuarial techniques that involve modelling a wider portfolio of risks and scenarios. These are useful to help understand how a business is likely to perform under different scenarios, and under what extreme circumstances the business would fail.  Knowing this extreme limit through a reverse-stress test, the business can then seek to better understand and prevent the factors for this scenario to materialise.  This might also inform the level and types of insurance to be purchased.

Read a case study that demonstrates the application of these techniques here

Project Managers are typically expected to manage risks in projects. For large scale, high criticality, or high risk projects, a specialist project risk manager that has a holistic view of the business and seeks to manage risks as an enabler to project success may be a more appropriate solution.  Barnett Waddingham has demonstrated its ability to proactively manage risks using simple, traditional techniques.  Where appropriate to do so, we can also help to implement forward looking risk-adjusted statistical analysis that helps identify project delays or over-spends earlier.

Read our innovative risk management for a FTSE100 company case study here.

There are a number of quantitative techniques that can be used to analyse risk and optimise outcomes that inform specific investments, programmes or business decisions.  We specialise in problems where the solutions are not immediately obvious or where ‘softer’ risk considerations could impact on the chosen option.  We work with clients to identify suitable techniques and carry out the relevant analysis that supports good governance and effective decision making.

Read about risk optimisation here and optimising risk and returns to inform decision making in the Oil & Gas Industry here

How precise is your forecasting?  Do your internal models sufficiently consider risk and volatility?  How do these reflect changes in your risk profile?  Given the increasing risk in global markets and the mounting pressure to meet market and shareholder expectations, some businesses are considering better alignment between existing risk analysis and planning, budgeting, and forecasting tools.  This provides more credibility and demonstrates process maturity.

We see the most risk-mature organisations embedding risk and analytical techniques into other business processes i.e. considering risk when prioritising key customers and suppliers and managing each category differently; having more robust controls for only high risk transactions; giving different compensation and benefits as well as employment terms for key employees.

Read about actuarial insights into customer loyalty programmes here.