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Risk and Capital management

Capital is the financial shock absorber of any commercial organisation. The amount of capital held and how these assets are structured is vital in preventing severe financial distress and/or failure. Critical to the capital decision is an understanding of the risks associated with your company’s business model.

Increasing economic uncertainty and the complexity of financial instruments has increased the importance of capital management and heightened the need to gain a greater understanding of risk. Further, risk management and associated regulatory requirements, such as Basel II, have created a need to quantify the elements of risk.

But how do you get it right? Who do you turn to for help with capital and risk?

Deloitte Actuaries & Consultants assists a wide range of financial service institutions to develop capital management strategies and to gain an understanding of key risks. We are able to assist clients across a range of areas:

Capital calculation

Capital is a critical component of any financial services firm. From a regulatory perspective, it is imperative that businesses understand their capital requirements whilst insights into economic capital are also valuable from a business growth perspective. Deloitte is well positioned to assist financial services in these capital related areas. We also have vast experience in determining Optimal bonus or dividend policies, setting target surplus and performance measurement.

Capital enhancement

The ability to remove risks from the balance sheet is a critical component of the business model of many financial services firms. Historically reinsurance has been a common tool for “de-risking” in the insurance industry whilst in the mortgage sector, securitisation markets have been utilised as a core source of funding. Deloitte can assist in many areas relating to these areas and more.

Enterprise Risk Management

A key service offered by many financial services companies is risk management. However in many cases the focus on risks within their own businesses has been low. This is changing with regulatory drivers, as well as advances in risk management practice across the financial services industry focusing on internally generated risks. Key areas where Deloitte can assist in this area include helping companies determine their risk appetite and risk tolerances along with assisting to understand and implement strategic risk measures.

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  • Capital calculation
    Capital is a crutial component of any financial services firm.
  • Securitisation
    Is this an option for your business?
  • Target surplus
    Some key questions for boards and management

Learn more

  • Asymmetric risks
    Deloitte presentation
  • Capital management breakfast
    Deloitte presentation
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