Risk management is an integral component of prudential management and good corporate governance. It represents a modern approach to business management under a competitive market environment in which businesses and technology are constantly evolving. This dynamism creates risks which may hinder the company in achieving its business objectives.

Muang Thai Life Assurance PCL. (MTL) recognizes the importance of an effective risk management system. The company has established a well-defined governance structure to manage the risk of the company in accordance with international practices to best protect the interest of all stakeholders. The risk management activities aim to promote risk awareness throughout the organization and to enhance our capabilities to manage risk effectively; allowing the company to achieve its objectives in line with its mission and vision.


MTL has set the guideline for managing risks as follows:

1. Risk Governance Structure: MTL has established the governance structure that support effective risk management. Risk management function is independent from other work functions. MTL has clearly specified roles and responsibilities includes reporting process that support risk culture in the organization.
2. Risk Identification: MTL has a process of identifying the risks that the company is exposed to.  The Risk Appetite and Risk Tolerance is determined by its ability to manage these risks.
3. Risk Assessment: MTL has used and developed several tools to measure and evaluate the risks faced by the company.
4. Risk Response: MTL has established guidelines and procedures to respond to the risks. As part of risk response, MTL may consider avoiding certain risks that we feel we cannot manage effectively. On the other hand, MTL may consider using risk management tools or strategies to mitigate or transfer the risks.
The guidelines and procedures to respond to the risks must be consistent with the nature of the business and the availability of personnel and information systems of the company.
5. Monitoring and Report: MTL has structured the risk reporting system to facilitate consistent and accurate risk information flow from risk monitoring persons to senior management and the Board of Director. 
6. Risk Management of Core Activities: MTL has established the risk management process for the core activities defined by Office of Insurance Commission that is consistent with the risks and complexity of the company. The process should be able to reflect the underlying risk, measure the risk appropriately, efficiently manage the risks, and monitor and control the risks from these core activities.

Risk identification of significant activities within the organization has been conducted and reviewed regularly which cover the category of risk as follows;

1. Strategic Risk 

Strategic risk is the risk that arises from (1) the consequent of choosing to execute a particular strategy and (2) the failure associated with the strategy implementation. According to MTL Risk Taxonomy, strategic risks can be classified into corporate planning risk and strategic implementation risk.

2. Operational Risk 

Operational Risk is the risk of loss resulting from failed, inadequate or inappropriate internal processes, people, systems and/or external events which impact to company operation or financial statement. This definition excludes strategic and reputational risk.
Operational risk includes information technology risk which refers to risks that may arise from use of IT in business which may have an impact on the Company’s systems or operations, which include risks arising from cyber threats

3. Insurance Risk 

Insurance risk is the risk from fluctuation of claim frequency, claim severity or time of claim occurrence that deviate from the pricing and reserving assumptions. Key assumptions include mortality rate, lapse rate, expenses and interest rate.

4. Investment Risk 

Investment risk comprises of market risk, credit risk, and liquidity risk.

Company also recognized the importance of asset-liability management (ALM), which the Investment risk and insurance risk are defined as risks related to ALM.

Moreover, there is reputation risk which is the risk that public recognize negative image or lost confidence of the company and may affect to company’s revenue and/or company’s capital in present and future. Reputation risk may arise as a result of occurrence of the risks mentioned above. 

The company also considers significant changes from both internal and external environment that leads to emerging risk which is the risk that have not occurred before or company may not experience it. Thus, it is difficult to assess the possibility and impact of the emerging risks. 

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