Managing risk is an integral part of Gjensidige’s day-to-day operations. Identification, assessment, management and control of risk exposure as well as analyses of the effects of potential strategic decisions on the risk profile are an essential part of operations. The aim is to ensure that the level of risk-taking is in keeping with the approved risk appetite and to enhance value creation.
The Group’s control functions are organised on the basis of the principle of three lines of defence, as illustrated below.
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| 1. line: Risk management and internal control | 2. line: Assess, evaluate and advice, quality assurance, quantification/aggregation of risk | 3. line: Independent function, confirm and give advice on risk management, internal control system, corporate governance |
The Board has overall responsibility for ensuring that the level of risk-taking in the Group is satisfactory relative to the Group’s financial strength and willingness to take risks, and it has adopted a risk appetite statement that covers the most important types of risks. This entails ensuring that necessary governing documents, procedures and reporting are in place in order to secure satisfactory risk management and compliance with laws and regulations and that the risk management and internal control efforts are appropriately organised and documented.
The Group CEO is responsible for overall risk management in the Group. The Group’s capital committee has an advisory role with regard to the assessment and proposal of changes in use of capital. Similarly the Group’s risk committee has a supervisory role with regard to the Group’s total risk situation and an advisory role in relation to the group CEO with regard to risk management. Both committees are chaired by the group CEO. Responsibility for ongoing risk management is delegated to the responsible line managers in their respective areas.
The risk management function is responsible for monitoring and developing Gjensidige risk management and internal control system. In addition, the function shall have an overview of the risks Gjensidige is or may be exposed to, and what this means for the group solvency.
The compliance function shall detect and prevent risks related to compliance with external and internal regulations. The risk management function and compliance function is headed by the Chief Risk Officer, and reports to Group CEO when it comes to subject matters.
The actuary function is responsible for coordinating the calculation and control of the technical provisions of insurance companies. The responsibility is centralised in the Group 's Actuary department.
The Group has an independent internal audit function, which monitors that the risk management and internal control systems function. The audit function reports directly to the Board.
Gjensidige shall have a capitalisation that is adapted to the Group's strategic targets and risk appetite at all times. The Group shall maintain its financial flexibility and at the same time exercise a stringent capital discipline that supports the return on equity target. Any future excess capital will be distributed to the shareholders over time.