Our risk processes
Our people and culture underpin all aspects of Aviva's risk management. We encourage diversity of thought and a culture of curiosity to ensure a broad range of risks are identified and considered. We continuously develop the skills and capabilities of our people to drive better business decisions that appropriately balance risk and reward.
The Risk Management Process (Identify, Measure, Manage, Monitor, Report) is designed to help the business discover, predict, understand and manage our risks, thereby maintaining a safe risk environment and enabling dynamic risk-based decision-making. These include the use of our risk models, Operational Risk and Control Management System (ORCM) and stress and scenario testing (SST)
You can read more about our approach to risk in our Annual Report and Accounts, which you can find on our results, presentations and reports page.
Identify and measure
We carry out regular risk identification as part of our business planning process and any major business initiatives. We draw on internal and external date, covering both normal conditions and stressed environments. We identify risks both top-down, at senior management level, and bottom-up, at business process level.
We measure risks on the basis of Solvency UK capital (and other bases if appropriate) to determine their significance relative to the potential return and appropriately direct resources to their management. We also measure the impact and likelihood of risks against our predefined appetites, tolerances, tiggers and limits. Models are used to measure risk and make decisions; these are rigorously reviewed (at least once a year).
Manage and monitor
Our risk management and mitigation activities (accept, avoid, transfer, mitigate) consider the expected return, associated risk and position relative to risk our appetite, including risk preferences, when taking risks.
We regularly monitor our risk exposures by risk types against risk appetites, as well as key risk indicators against operating and financial risk tolerances, tiggers and limits. We assess the impact of prospective changes in the risk profile on key metrics/dimensions. The return achieved on risk-taking activities is monitored and compared to that expected when the risk was taken.
Report
- Material risks and trends
- Performance and its impact on our risk profile, historical and prospective.
- Decisions, taking account of risk reward trade-offs.
- Projections/forward-looking views.
- Mitigating actions.
- Risk exposures vs. appetite, preferences, limits and tolerances.