RISK
MANAGEMENT
2022 Annual Report
BARENTS RE REINSURANCE COMPANY, INC.
BARENTS RE REINSURANCE COMPANY, INC.
RISK
MANAGEMENT
RISK
MANAGEMENT
Barents Re Reinsurance Company, Inc. (Cayman Islands) and its affiliate, Barents Reinsurance S.A. (Luxembourg) maintain a strong regulatory system.
Barents Re Reinsurance Company, Inc.
Operating in the Risk industry the way we do, requires a well defined Risk Management Framework that supports our Shareholder’s business strategy and provides the necessary advice and comfort related to the different risks that arise from our operations.
Year after year Barents RE has managed to capitalize on the different markets it operates and part of that business success is due to the Risk Monitoring it has in place to make sure that even choosing to be bold in some of our business strategies, we remain between our Shareholders’ risk appetite and tolerance. Part of our Risk Management Framework objective is to identify, evaluate and manage significant risks that may arise from our operations, business and environment for which we defined the following key risks factors:
- Credit
- Market
- Underwriting
- Retrocession
- Liquidity and Investment
- Accounting
- Strategic
- Reputational
- Operational
- Human Resources
- Information Technology
- Legal
- Compliance
- Anti Money Laundering
- Financing of Terrorism
Barents Re Reinsurance Company, Inc. is regulated by the Cayman Islands Monetary Authority.
We have implemented several risk assessment techniques within our framework that enable the continuous evaluation of these factors and new ones that may impact our organization:
- Emerging risks analysis
- Risk Register
- Own Risk and Solvency Assessment (ORSA)
- Business Continuity Plan (BCP).
- Risk Policy
Barents Reinsurance S.A.
Barents Re is exposed to a variety of risks through the normal course of its business. These risks need to be effectively managed to ensure they do not impact the ability to achieve business objectives. Effective risk management is thus critical to the success of Barents Re.
Barents Re’s objectives in managing risks include:
- Informing management decision making, improving transparency and accountability for risk though the
organization through detailed risk reporting and effective risk governance. - Identifying opportunities where risk levels can be increased, in line with the risk appetite, to maximize
rewards. - Enabling the quantification of solvency capital required to cover material risks to which the business is
exposed to. - Embedding risk awareness to foster a risk culture across the business.
- Identification of emerging risks such that the business can take appropriate actions to effectively manage
these.
To achieve these objectives, Barents Re operates a comprehensive risk management framework and system of internal control. Through these processes, the senior management are informed of the most significant risks exposed to the business on an ongoing basis. Additionally, Barents Re has in place a system of governance which provides a structure for effective risk management. This is referred to as the three lines of defense, and it provides a clearly defined structure and allocation of risk responsibilities across the business functions.
Barents Reinsurance S.A. is regulated by the CAA in Luxembourg, and Barents Reinsurance S.A. (London Branch) is also regulated by the FCA / PRA in the United Kingdom.
Below are the significant risks to which the business is currently exposed. It should be noted that in addition to these, the business is also exposed to emerging risks and uncertainties (i.e., climate change) which could adversely impact the business.
- Insurance risk
- Credit risk
- Market risk
- Liquidity risk
- Operational risk
These risks are assessed through various risk processes which include the ORSA, risk appetite monitoring, stress and scenario testing and risk and control assessments. These processes are reviewed on an ongoing basis to ensure they remain appropriate for the business and risk profile.
