Risk Management at the Group level is more extensive than that the level of individual companies. The Risk Management system at the group level must be adequate, efficient and proportional to, as well as compliant with the structure, nature, volume and complexity of operations and related risks. The system focuses particularly on the risks at the Group level and examines the risks at the level of individual subsidiaries, the interactions of risks between the subsidiaries, as well as risk concentration. Due to the diversity of the structures and systems within the Group, the decision making at the Group or subsidiary level incorporates the specifics of the situation and the effect of the decision on both levels. This was enabled by the reorganisation and centralisation of functions in the Group in recent years, and the establishment of the Subsidiary Governance Committee.
In spite of its complexity, the Triglav Group has established an efficient and particularly reliable Risk Management system. The systems at the Group level are characterised by two concepts: the requirement of consistent Risk Management across the entire Group and the concept of centralised Risk Management. The Triglav Group's system takes both into account and considers them as complementary rather than contrasting concepts.
The Group has established the strategy and policy defining, categorising and monitoring the risks to which it is exposed. This is the basis for the Risk Management strategy, which has been enacted in the policies of all members of the Group. Individual subsidiaries are then responsible for the adequate implementation of both strategies in daily operations at the member level.
The hierarchy structure and participation of all employees as well as the strong organisational structure, emphasising the importance of risk management at all levels provide for the efficacy of the system. Clear and transparent information flows both top-down and bottom-up, further strengthening the system. Implemented compatible IT systems enabling the unification of internal control systems in turn facilitate the efficient flow of information, as well as the transparency of the decision-making process.
Major development activities concerning the Risk Management system in 2011 included:
- establishment of a minimum internal control standard to ensure the regularity and reliability of financial and accounting reporting of the insurance companies within the Group;
- development of ALM models for long-term business funds and assets backing the liabilities of Zavarovalnica Triglav;
- other preparatory activities for the Solvency II Directive and phase 2 of the IFRS 4 financial reporting standards.