Despite years of investment in the development of the function, investment risk management at pension funds and insurance companies still fails to deliver on the promise. Several fundamental issues are to blame and there is a fix, but it requires different set of skills.
For several years now regulators have paid disproportionate attention to risk management at pension funds and insurance companies. After years of investment, database rollouts, building stronger risk functions and reporting procedures one would expect that the end client – the Boards, who are supposed to be the consumers of risk intelligence as the responsible risk-takers, should be satisfied by the “service” provided by the industry. Yet, our discussions and meetings suggest that nothing is further from the truth.
There is plenty of reporting, of course, but it falls short in two areas:
- counterintuitive pro-cyclicality of any action based on the reporting
- the difficulty of interpreting of and acting upon the day-to-day numbers
Webinar / Why Are We Still Unhappy About Investment Risk Management?
Full webinar is now available. Click below to access the recording.