This guide covers the evolution and application of the concept of inherent risk, originally rooted in insurance practices. In the past, underwriters used Maximum Possible Loss (MPL) to assess potential catastrophic losses, focusing on worst-case scenarios. However, this approach was highly theoretical and often unrealistic. Over time, insurers transitioned to Estimated Maximum Loss (EML), which… Continue reading Guide to inherent and residual risk
Tag: Internal audit
Never compare inherent to residual risk again
The concept of inherent risk originated in insurance where underwriters used Maximum Possible Loss (MPL) to determine the total value that could be lost in a catastrophic event. MPL considers the absolute worst-case scenario, with no controls in place, even if it’s highly unlikely to occur. The concept of considering the worst-case scenario loss has… Continue reading Never compare inherent to residual risk again
RISK-ACADEMY’s guide on ISO31000:2018
We are excited to announce the release of our new RISK-ACADEMY guide on ISO31000:2018, a globally recognized standard for risk management. Our guide is designed to help organizations implement the principles of ISO31000:2018 and mature their risk management practices. Our comprehensive guide provides an in-depth understanding of the ISO31000:2018 standard, including its key principles and… Continue reading RISK-ACADEMY’s guide on ISO31000:2018
5 reasons why internal audit may be the best place for the risk manager to sit
A while back I recorded a short video on the topic of risk management organizational structure in a non-financial company. In the video I discussed various options for risk manager’s place in the overall organizational structure. Since there is really no single right answer, the few common options include: reporting directly to the CEO, reporting… Continue reading 5 reasons why internal audit may be the best place for the risk manager to sit
