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ERM for Non-Corporate Entities Sim Segal, FSA, CERA President, SimErgy Consulting

ERM for Non-Corporate Entities Sim Segal, FSA, CERA President, SimErgy Consulting Author, Corporate Value of Enterprise Risk Management ERM Symposium 2012 Washington, D.C. April 19, 2012. Examples of non-corporate entities. Nonprofit organizations Charities Professional associations

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ERM for Non-Corporate Entities Sim Segal, FSA, CERA President, SimErgy Consulting

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  1. ERM for Non-Corporate Entities Sim Segal, FSA, CERA President, SimErgy Consulting Author, Corporate Value of Enterprise Risk Management ERM Symposium 2012 Washington, D.C. April 19, 2012

  2. Examples of non-corporate entities • Nonprofit organizations • Charities • Professional associations • Government bodies • Individuals

  3. ERM complications at non-corporate entities

  4. Likelihood Key Metric #1 Objectives-Based ERM Framework Risk Appetite Strategy Risk Mgmt Tactics ERM Committee Qualitative Assessment Impact Scenario Development Enterprise Risk Exposure Severity 6 All Risks Key Risk Scenarios Correlation Likelihood ERM Model ▪ Baseline ▪ΔBaseline X Mostly Objective Key Risks 1+ events / sim 1 event / sim Individual Risk Exposures Mostly Subjective Identification Quantification Decision-Making

  5. ILLUSTRATIVE EXAMPLE Developing risk scenarios: FMEA • Risk: Legislation Risk • Attendees: xxx, xxx, xxx • Scenario 1: Legislation passes reducing business opportunity in certain markets • Likelihood: 5% • Financial impact: • Revenue impact • 50% loss of planned revenues in market A • 1st year: -$2.5M • 2nd year: -$2.6M • etc. • 100% loss of planned revenues in market B • 1st year: -$1.0M • 2nd year: -$1.1M • etc. • Expense impact • Reduction in workforce • -10% of salary and related benefits • +$100K severance costs

  6. Contact information Sim Segal, FSA, CERA President SimErgy Consulting LLC Chrysler Building 405 Lexington Ave., 26th Flr New York, NY 10174 (917) 699-3373 Mobile (646) 862-6134 Office (347) 342-0346 Fax sim@simergy.com www.simergy.com

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