Risk management philosophy
Delta Lloyd Group’s risk management policy is closely linked to the strategic pillar “certainty” and provides protection against events that may jeopardise the achievement of sustainable results, the required minimum solvency or our strategic objectives. Delta Lloyd’s mission is to offer financial security. Our risk management system is fully embedded in our daily operations. It seeks to identify, analyse, measure, manage, control and audit risks that may arise in the course of business operations, in a timely manner. This helps the Group maintain its ratings, meet our obligations to customers and other creditors and comply with applicable legislative and regulatory requirements. Our approach to risk management is based on the following elements:
- Risk governance: the risk management organisation, based on a governance framework comprising ‘three lines of defence’ and risk committees. This framework outlines the responsibilities and guidelines for Delta Lloyd Group’s management structure. Each division has a dedicated audit and risk committee which supervises the effectiveness of the business control systems within the responsibility of the respective business units, as well as a dedicated Asset & Liability Committee (ALCO).
- Risk processes and systems: the risk management framework takes into account all relevant elements of risk management, including an internal model for economic capital calculation, a solid risk management cycle and the interrelationship between governance and management information.
- Risk culture: the correct 'tone at the top' and active involvement of the Executive Board and the business units’ boards in risk/return considerations.
- Risk taxonomy and mitigation: the risk management policy framework that encompasses the ‘risk universe’ of all relevant risks for Delta Lloyd and contains a set of mandatory policies to control and manage risk according to specific guidelines .The annual Group Risk Appetite Statement defines the risk appetite for all risks within Delta Lloyd Group.
- Capital model: Delta Lloyd uses the IGD Group Solvency model and has opted to report future regulatory solvency on the basis of an internal model for Solvency II. Delta Lloyd already applies this model for internal purposes to calculate economic capital.