Constructing a Risk Appetite Framework: An Introduction

Paper on Risk Appetite

The attached paper on "Constructing a Risk Appetite Framework: An Introduction" was written by a Working Party of the Enterprise Risk Management Committee of the Society of Actuaries in Ireland.  This paper is intended to act as an aid to undertakings working towards compliance with the Central Bank of Ireland "Corporate Governance Code for Credit Institutions and Insurance Undertakings".  Under the Code:

 “The board is required to understand the risks to which the institution is exposed and shall establish a documented risk appetite for the institution”.

 The documented risk appetite must be in place by 30th June 2011, so this paper is timely.  Readers who are new to the measurement and determination of risk appetite, as well as those who are familiar with these concepts, should find it to be a useful resource.  

Discussion Evening

The authors of the paper plan to host an interactive discussion evening on risk appetite in the coming months.  They are therefore interested in receiving feedback on the types of practical issues that are being encountered in determining risk appetite.   This feedback will form the basis for what promises to be a very interesting and informative discussion.  

If you would like to submit a topic for discussion, please do so on the Society’s online discussion forum (member login required).

Comments submitted may be viewed and read by other members.  If you would prefer to submit comments on a confidential basis, please email them to the Society at:  We will then post your comments / queries to the forum without disclosing your identity or your company’s identity (but in this case, please ensure that identity cannot be inferred from your comments as we will not edit them).   If you are not a member of the Society, you are welcome to submit comments / queries by email to:, and you will also be welcome at the evening discussion, details of which will be posted to the website in due course.