Our business

Risk committee

Assisting the Board in its oversight of risk within the Group.

The principal purpose of the committee is to assist the Board in its oversight of risk within the Group, with particular focus on the Group’s risk appetite, risk profile and the effectiveness of the Group’s Risk Management Framework. We review the risks inherent in both our investment portfolios and in the insurance products we offer our clients.

In addition to the risks inherent in investing and in providing assurance, we review the strength of our capital base and our liquidity position, the level of our operational risk, and the significant ongoing changes to the regulatory framework.

The capital implications of Solvency II and the Group’s status as a Global Systemically Important Insurer (GSII) pose risks to the Group and the committee has monitored development of these issues closely during the year and will continue to do so throughout 2019.

The committee ensures that due diligence appraisals are carried out on strategic or material transactions, and also works with the Remuneration Committee to ensure that risk management is properly considered in setting the Group’s Remuneration Policy.

The committee comprises independent non-executive directors.


Belén Romana García?(appointed 26 June 2015)(chair)[1]
Michael Mire (appointed 12 September 2013)
Patrick Flynn?(appointed 16 July 2019)
George Culmer?(appointed 25 September 2019)
Amanda Blanc?(appointed 2 January 2020)

Membership and Attendance in 2018

Member Number of meetings attended Percentage attendance*
Michael Hawker ** 5 100%
Glyn Barker
5 100%
Claudia Arney 5 100%
Michael Mire
5 100%
Belén Romana García (chair) ***?
5 100%
Keith Williams **** 5 100%

* This shows the percentage of meetings which the committee member attended during the year whilst a member of the committee.

** Michael Hawker retired from the committee and his Chairmanship with effect from 31 March 2019.

***Belén Romana García was appointed as Risk Committee Chair with effect from 5 July 2019.

****?Keith Williams retired from the Committee with effect 23 May 2019.

[1] Chair from 5 July 2019

The following officers normally attend, by invitation, all meetings of the committee:

  • Group Chairman
  • Group Chief Executive Officer
  • Group Chief Risk and Capital Officer
  • Chief Financial Officer
  • Chief Audit Officer.

Other members of senior management are also invited to attend as appropriate, to present reports.

Committee role and responsibilities

The committee oversees all aspects of risk management in the Group, save for conduct and financial crime risk, and brand and reputation risk (oversight responsibility for which lies with the Governance Committee). Consequently the committee’s particular focus is on market, credit, liquidity, insurance and operational risk, and in considering their impact on both the financial and non-financial goals of the Group. The main responsibilities of the committee are to:

  • Review the Group's future risk strategy and its risk appetite, particularly in relation to capital and liquidity and to make recommendations on risk appetite to the Board
  • Review the implementation of management actions and strategic decisions required to meet the capital implications of the new Solvency II and GSII (Global Systemically Important Insurer) regulations
  • Review the Group's investment risk strategy, credit limit framework and approve individual counterparty exposures in excess of limits
  • Review the design, completeness and effectiveness of the Risk Management Framework relative to the Group's activities and to assess the adequacy and quality of the risk management function and effectiveness of risk reporting within the Group
  • Review the methodology and assumptions used in the Group's model for determining its economic and regulatory capital requirements and satisfy itself that the assumptions and calibrations used reflect the Group's forward-looking risk profile
  • Review and approve risk policies and any relevant Group business standards, and to monitor compliance with these and management's actions to remedy any breaches
  • Satisfy itself that risks to the Group's business plan and any capital implications are adequately identified and assessed by management through appropriate stress testing, and that mitigating actions are implemented
  • Satisfy itself that risk-based information is used effectively by management
  • Ensure that a due diligence appraisal of strategic or significant transactions due to be proposed to the Board is undertaken before the Board takes a decision on whether to proceed
  • Review the effectiveness of operational controls
  • Work with the Remuneration Committee to ensure that risk is considered in setting the overall remuneration policy for the Group
  • Review relationships with prudential regulatory authorities in relevant jurisdictions and developments in the prudential regulatory environment, and review significant actual or potential breaches of prudential regulation and actions being taken to address these
  • Review and recommend to the Board for approval any material regulatory filings
  • Review the security and resilience of the IT infrastructure of the Group.

Read the full terms of reference (PDF 55 KB) for our Risk Committee.

Activities during 2018

A summary of the committee’s activities during 2018 is shown below, full details can be found in the committee’s report in the?2018 Annual Report and Accounts.

  • Reviewed and recommended the Group’s risk policies for Board approval
  • Reviewed reports on the updated audit approach under the Group’s Operational Risk and Control Methodology
  • Reviewed and recommended for Board approval the Group’s Solvency II Capital and liquidity risk appetite
  • Reviewed capital and liquidity projections including the Group’s shareholder cover ratio and liquidity cover ratio
  • Reviewed updates on credit risk and the Company’s credit exposure and reviewed mitigating actions
  • Received updates on the asset portfolio; including global economics, assessment of macro economic impacts on the equity release market and investment updates.