Functions and organisation of risk monitoring and control

In our risk management activities, we continually analyse our risk situation. Our experts evaluate the most important risks for us with a view to their occurrence probability and possible financial repercussions. In addition, we carry out stress tests and scenario analyses and take appropriate measures for excluding or limiting unacceptable risks.

The Munich Re Group's risk management is uniformly structured for reinsurance, primary insurance and asset management, and applies Group-wide. This permeating structure is flexible and can be adjusted to current situations where required. Key features of our risk management system are centralised organisation and decentralised implementation. There is strict separation of risk management and risk controlling, and the related responsibilities are clearly defined.

The central risk controlling unit defines standards, develops and maintains the systems and coordinates risk management activities. It is also responsible for regularly informing management about the current risk situation and for proposing measures relating to risk policy.

Competence and responsibility for managing risks lies largely with the decentralised risk managers of the Munich Re Group, who are able to take the appropriate steps to deal promptly with any situations arising. These risk managers are responsible for the risk situation in their respective units and it is their job to check and continually monitor whether the risk policy measures taken are sufficient to effectively reduce the risk potential.

The role of internal auditing at the individual Group companies is to examine independently the risk management system and its further development. It also checks whether the controls and monitoring measures that have been implemented are appropriate and are being complied with.

Our risk management system is also checked by the external auditor as part of the annual audit.